You are considering a mutual fund that is expected to return 17% this year. The beta of
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Question:
You are considering a mutual fund that is expected to return 17% this year. The beta of her portfolio is 1.2.
a. If the risk-free rate is 2% and you expect the rate of return on the market portfolio to be 15%, what expected rate of return would you demand before you would be willing to invest in this mutual fund?
b. Is this fund attractive?
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