Consider two mutual funds, A and B. The beta for fund A is 0.60, and the...
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Consider two mutual funds, A and B. The beta for fund A is 0.60, and the standard deviation of the rate of return = 0.20. The beta for fund B. is 1.30 and its standard deviation of the rate of return = 0.325. The standard deviation of the market portfolio is 0.25. Are these funds as well diversified as possible? Consider two mutual funds, A and B. The beta for fund A is 0.60, and the standard deviation of the rate of return = 0.20. The beta for fund B. is 1.30 and its standard deviation of the rate of return = 0.325. The standard deviation of the market portfolio is 0.25. Are these funds as well diversified as possible?
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To assess the diversification of the mutual funds A and B we need to consider their beta values and standard deviations of the rate of return as well ... View the full answer
Related Book For
Corporate Finance
ISBN: 978-0077861759
11th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Posted Date:
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