Can someone help me with the assignment below
Problem 23
Part A) Yes, you should invest in this fund. It has a lower beta than the market portfolio and still offers a rate of return higher than the risk free rate. The fund’s alpha is 9%.
Part B) A passive portfolio with an allocation of 60% invested in market-index portfolio and 40% invested in a money market account would have the same beta as this mutual fund (0.8). The expected rate of return on this passive portfolio would be 14%, which equals to the expected return from part A plus the alpha from part A (14 = 5 + 9). Therefore, the difference between these two returns is equal to alpha from Part A.