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You are presently invested in the Friendly Fund, a broad based mutual fund. The Friendly Fund has an expected return of 14% and a volatility
You are presently invested in the Friendly Fund, a broad based mutual fund. The Friendly Fund has an expected return of 14% and a volatility of 20%. Risk-free Treasury bills are currently offering returns of 4%. You are considering adding an agricultural products fund to your current portfolio. The agricultural products fund has an expected return of 10%, a volatility of 30%, and a correlation of .20 with the Friendly Fund. What is the beta of the agricultural products fund? What is the required rate of return for the agricultural products fund? Will adding the agricultural products fund improve your portfolio? [Enter 1 for Yes, or 2 for No]
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