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a mutual fund manager expects her portfolio to earn a rate of return of 11% this year. the beta of her portfolio is 0.6. the rate of return available on risk-free assets is 4% and you expect the rate of return on the market portfolio to be 14%. what expected rate of return would you demand before you would be willing to invest in this mutual fund? (do not round intermediate calculations. enter your answer as a whole percent.) is this fund attractive to you? multiple choice no yes

Sagot :

No, this fund is not attractive to you because it is below the expected rate of return of 10.4%.

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

The expected rate of return is the return investors anticipate receiving from an investment over the long term. It is calculated by multiplying the probability of each possible outcome by the expected return of that outcome and then summing the results.

Expected rate of return = 4% + 0.6(14% - 4%) = 10.4%

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