Question: 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

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.

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