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A mutual fund manager expects her portfolio to earn a rate of return of 10% this year. The beta of her portfolio is .9. Assume rate of return available on risk-free assets is 3% and you expect the rate of return on the market portfolio to be 13%.

a. Calculate the expected rate of return that investors will demand of the portfolio.

b. Should you invest in this mutual fund?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91619751

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