Question: 2. Consider the table below showing return & risk for two funds. Mutual Funds Returns Standard Deviation Fund A : Well diversified value fund 10%

2. Consider the table below showing return & risk for two funds.

Mutual Funds

Returns

Standard Deviation

Fund A : Well diversified value fund

10%

16%

Fund B: A risk less Fund

3.5%

0%

2.A Show risk & return for a security consisting of 60 % in risky fund & 40 % risk less fund. Show calculations.

2.B Show return & Risk for a portfolio consisting of 130 % in risky fund in the context of CAPM. Show calculations.

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