In advising a client you are considering adding a mutual fund, FundsRUs, to the client's portfolio of investments. The fund has a beta coefficient of 1.35 and currently the return on an average risk security in the market is 7.5%. The risk-free rate (i.e., rate on long-term Treasury securities used as a proxy) is 4%. What is the expected return for the mutual fund FundsRUs.

Answer rating: 100% (QA)

The expected return for the mutual fund FundsRUs can be calculated using the Capital Asset Pricing M... View the full answer