Use the Information for the Question(s) Below

question 78

Multiple Choice

Use the information for the question(s) below.
You are presently invested in the Luther Fund, a broad based mutual fund that invest 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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