Question 6 2.5pts If the risk - free rate of return is 2.1%, the beta of the mutual fund is 1.7, and the return of market is 5%, what is the required rate of return? 8.5% 7.0% 11.5% 9.7% D Question 6 د C If the risk-free rate of return is 2.1 %, the beta of the mutual fund is 1.7, and the return of market is 5%, what is the required rate of return? 8.5% 7.0% 11.5% 9.7% 2.5 pts

Question 5 A hedge fund may charge a special performance fee which commonly ranges from: O 10 to 15 percent of NAV. 15 to 20 percent of the fund's profits. 20 to 30 percent of NAV. 20 to 40 percent of the market price. 20 to 40 percent of the fund's profits.

7 You have been given the following return information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is 0.97. Year 2018 2019 2020 2021 2022 Fund -21.8% 25.1 Sharpe ratio Treynor ratio 14.1 6.4 -2.22 Market -41.5% 21.2 14.5 8.8 -5.2 Risk-Free 3% 4 2 4 3 What are the Sharpe and Treynor ratios for the fund? Note: Do not round intermediate calculations. Round your answers to 4 decimal places.

Question 7 The following figures show the optimal portfolio choice for two investors with different levels of risk-aversion graphically. Which statement is correct? E[R] 0.3 0.25 0.2 0.15 0.1 0.05 0 0 0.05 0.1 0.15 Figure 1 0.2 0.25 0.3 0.35 0.4 0.45 o(R) [a]H 0.3 0.25 0.2 0.15 0.1 0.05 0 0 Figure (2) shows an investor that borrows in risk-free rate and invests in the risky asset. Figure (1) shows an investor with a conservative investment behavior. 0.05 0.1 0.15 In the optimal point of both figures, the highest indifference curve is tangent to the efficient frontier. In Figure (1), more aggressive investment decision led to a higher Sharpe ratio. Figure 2 0.2 0.25 o (R) 0.3 0.35 0.4 0.45