Question: 7. Here are data on five mutual funds: Fund A B C D E Return 14 12 16 10 20 Std. Deviation 6 4 8

7. Here are data on five mutual funds: Fund A B C D E Return 14 12 16 10 20 Std. Deviation 6 4 8 6 10 Beta 1.5 0.5 1.0 0.5 2.0 What is the reward-to-variability ratio and the ranking if the risk-free rate is 3%? Now assume that the zero-Beta form of the CAPM is appropriate. What is the differential return for the funds if R = 4%?

7. Here are data on five mutual funds: What is the reward-to-variability ratio and the ranking if the risk-free rate is 3% ? Now assume that the zero-Beta form of the CAPM is appropriate. What is the differential return for the funds if Rz=4%

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