You are presently invested in the Luther Fund, a broad based mutual fund that invest in stocks and other securities. The

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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 16%
and a volatility of 22% .
Risk-free Treasury bills are currently offering returns of 6% . You
are considering adding a
precious metals fund to your current portfolio. The metals fund has
an expected return of 10% , a volatility of 25% , and a correlation
of -0.22 with the Luther Fund.
a. What is the beta of the precious metals fund with the Luther?
Mark the correct answer.
-0.25
-0.26
-0.30
-0.29
-0.27
b. What is the expected return on the precious metals fund? Mark
the correct answer.
3.13%
3.36%
3.05%
3.5%
3.30%