Did the mutual fund under or over perform based upon capm

Assignment Help Financial Management

Reference no: EM131878636

You have a mutual fund that returned 13% for the year while the risk-free rate was 4%. The market beta for the fund was 1.3 and the excess return on the market portfolio was 7%. Additionally, the risk premiums on the SMB and HML were 1% and 3%, respectively. The estimate of the risk factor sensitivities for the SMB and HML risk premiums (ie. their betas) are 0.4 and-0.5, respectively.

Did the mutual fund under or over perform based upon the CAPM?

Reference no: EM131878636

Questions Cloud

What are the operating cash flows in the first year : What are the Operating Cash Flows in the first year (Year 1) with the new machine?

Require premium on seaside builders bonds : Why do investors require a premium (higher rate of return) on Seaside Builders’ bonds?

Identify the contribution that was made by the researcher : Identify one of the historical researchers who have been instrumental in advancing the related sciences of Job Design and Work Measurement.

Review problem related to the fused sentence icon : To identify a fused sentence, drag and drop the Fused Sentence icon (see upper right) over the word before or after the space where the clauses should split.

Did the mutual fund under or over perform based upon capm : Did the mutual fund under or over perform based upon the CAPM?

Discuss your qualitative methodology : Prepare a report of approximately 1,500 words in which you: Discuss your Qualitative methodology and method for the collection of your data

Calculate the net present value for project : Calculate the net present value (NPV) for project A and project B. Should the project with the higher NPV be chosen? Explain your answer.

Shares outstanding has payout policy of distributing : An all-equity firm with 40M shares outstanding has the payout policy of distributing 50% of its net income as dividends to its shareholders every year.

Cost associated with reinvested earnings : Should the component costs be figured on a before-tax or an after-tax basis? Why is there a cost associated with reinvested earnings?

User Account

All Pages