Question: show excel formulas in calculations and =formulatext or explain 5 As an equity analyst, you have developed the following return forecasts and risk estimates for

 show excel formulas in calculations and =formulatext or explain 5 As

show excel formulas in calculations and =formulatext or explain

5 As an equity analyst, you have developed the following return forecasts and risk estimates for two different stock mutual funds (Fund T and Fund U): (a) If the risk-free rate is 3.9 per cent and the expected market risk premium (i.e. E(Rs)RFR) is 6.1 per cent, calculate the expected return for each mutual fund according to the CAPM. (b) Using the estimated expected returns from Part a along with your own return forecasts, demonstrate whether Fund T and Fund U are currently priced to fall directly on the security market line (SML), above the SML, or below the SML. (c) According to your analysis, are Funds T and U overvalued, undervalued or properly valued

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