Problem 12-26 CAPM and Expected Return (LO2) A mutual fund manager expects her portfolio to earn a rate of return of 10% this year. The beta of her portfolio is .5. Assume rate of return available on risk-free assets is 3% and you expect the rate of return on the market portfolio to be 13%. a. Calculate the expected rate of return that investors will demand of the portfolio. Expected rate of return % b. Should you invest in this mutual fund? O Yes