A Portfolio Consists of an Index Mutual Fund Which Represents

question 31

Multiple Choice

A portfolio consists of an index mutual fund which represents the overall market and Treasury bills.The fund has a portfolio weight of 60%.The risk-free rate is 3.2% and the market risk premium is 7.6%.What is your best estimate of the portfolio expected rate of return?

• A) 8.39%
• B) 7.76%
• C) 10.80%
• D) 9.02%

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