Use the Information for the Question(s)below

question 121

Multiple Choice

Use the information for the question(s) below.
You are presently invested in the Luther Fund,a broad based mutual fund that invests in stocks and other securities.The Luther Fund has an expected return of 14% and a volatility of 20%.Risk-free Treasury bills are currently offering returns of 4%.You are considering adding a precious metals fund to your current portfolio.The metals fund has an expected return of 10%,a volatility of 30%,and a correlation of -.20 with the Luther Fund.
-The beta of the precious metals fund with the Luther Fund
Is closest to:

• A)-0.3
• B)-0.6
• C)0.3
• D)0.6

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Definitions:

Reckless Disregard

A conscious indifference to the rights or safety of others that represents a significant deviation from reasonable conduct.

Knowledge of Falsity

Pertains to the awareness that a particular statement or claim is false.

Fundamental Right

A right considered to be essential for the liberty or well-being of individuals, often protected by law.

U.S. Supreme Court

The highest federal court in the United States, which has ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law.