Samantha Miller manages a portfolio with a beta of 1.42 for Duke Capital.  She averaged an an annual return of 14% over the last 10 years, beating the market which averaged 12% per year over the same period.  Duke Capital proudly tells its clients that it is doing a great job for them because the portfolio has beaten the market for a decade. 

 a..  If the risk-free rate is 2.5% explain whether the Duke Capital has done a good job for her investors. (please round your answer to the nearest percent)   

b. What beta is the portfolio manager's return is consistent with?  In other words, what beta would produce the portfolio manager's return?

Answer rating: 100% (QA)

a If the riskfree rate is 25 ten CAPM return would be calculated as follows Expected r... View the full answer