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Author Question: A friend tells you about a mutual fund called the Global Asset Fund. The fund's expected return and ... (Read 114 times)

cnetterville

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A friend tells you about a mutual fund called the Global Asset Fund. The fund's expected return and beta for next year are shown in the table below. The expected return and beta of the risk free asset and the market portfolio are also shown in the table. Consider an alternative investment strategy of investing in a portfolio on the Security Market Line with the same beta as the Global Asset Fund. What return should you expect to earn from that portfolio?

AssetExpected ReturnBeta
Risk-Free5.5%0
Market Portfolio11.5%1
Global Asset Fund16%1.59

◦ 12%
◦ 13%
◦ 14%
◦ 15%
◦ 16%


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Marked as best answer by cnetterville on Apr 25, 2021

nekcihc358

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cnetterville

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Reply 2 on: Apr 25, 2021
Excellent


AmberC1996

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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