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Suppose the market risk premium is 9% and the risk free rate is 6% In a period where the market moved up by 30% during a single year, you observe the following risk and return data for mutual funds:
Fund A: return = 30% and beta = .8
Fund B: return = 34% and beta = 1.2
Fund C: return = 33% and beta = 1.0
Which fund has offered the best risk adjusted return?
Hint: The risk-adjusted return is the difference between the realized return (for example 30% for Fund A) and the expected return according to CAPM
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After six months go by, you receive the first interest payment of $300. The annual market interset rate has declined to 5 percent and you decide to sell the bond. What is the bond's present value when you sell it? show your work.
You bought one of Bergen Manufacturing Co.’s 7 percent coupon bonds one year ago for $1,045. These bonds make annual payments and mature twelve years from now. Suppose you decide to sell your bonds today when the required return on the bonds is 6 per..
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Calculate and interpret descriptive statistical analysis
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