Problem: Suppose you invested in Mutual Fund-X. You go to yahoo.finance website and find outthat the fund's beta is 1.36. Using 6 percent market risk premium and 3.3% risk free rate,
Required:
Question 1: What is the return you expect to earn from your mutual fund investment, if the CAPM is the correct model to value assets?
Question 2: How do you interpret b=1.35 of your Mutual Fund-X?
Note: Please provide through step by step calculations.