Problem dumb beta strategy and sharpe ratiotwo mutual funds, Ask an Expert

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Problem: Dumb Beta Strategy and Sharpe ratio

Two mutual funds, fund A has a beta of 1.5, fund B has a beta of 0.5, unchanged regardless of market condition. Assuming expected returns follow the CAPM model.

(1) Does fund A always have higher return than fund B?

(2) Which fund has higher Sharpe Ratio?

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Reference No.:- M92604348

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