What is return if beta is the appropriate measure of risk

Reference no: EM13907675

Fund Return	Standard Deviation	Beta
A 14	6	1.5
B 12	4	0.5
C 16	8	1.0
D 10	6	0.5
E 20	10	2

1. For the above data, what is the differential return if beta is the appropriate measure of risk?

2. Assume that the zero-beta form of the capital asset pricing model (CAPM) is appropriate. What is the differential return For the above data, if Rz = 4%?

3. For funds A and B in Problem 1, how much would the return on B have to change to reverse the ranking using the reward-to-variability measure?

Reference no: EM13907675

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