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GoodMad_ GoodMad_
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7 years ago
You have just read the annual report of a mutual fund. It boasted of a 26% return and advertised that it had beat the market return last year by three percentage points. In doing some research you discover the fund had a beta of +1.5 and the return on risk-free Treasury securities was 15.0%. Assuming a market risk premium of 8.0% should be used to evaluate performance means that
A) the fund's performance was no better than what you would have expected.
B) the fund's performance was good, but not impressive; it beat the market, but only by one percentage pointnot three.
C) the fund's performance was impressive; three percentage points is significant, given the above data.
D) the fund's performance was actually a percentage point less than what you would have expected.
Textbook 
Personal Finance: An Integrated Planning Approach

Personal Finance: An Integrated Planning Approach


Edition: 8th
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imoyseimoyse
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GoodMad_ Author
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#2
7 years ago
I'll mark it solved, you deserve it
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