Calculate the expected rate of return-mutual fund

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Reference no: EM13938325

A mutual fund manager expects her portfolio to earn a rate of return of 8% this year. The beta of her portfolio is .8. Assume rate of return available on risk-free assets is 5% and you expect the rate of return on the market portfolio to be 10%.

a) Calculate the expected rate of return that investors will demand of the portfolio

b) Should you invest in this mutual fund?

Reference no: EM13938325

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