Listed below are the characteristic lines and correlations


Listed below are the characteristic lines and correlation's (correlation of each fund with the market) for three mutual funds:

R1=-0.5 + 1.25Rm p=0.8

R2=1.25+0.95Rm p=0.75

R3=0.75+1.35Rm p=0.7

Which fund has the most non-diversifiable risk?

What percent of each fund's risk is systematic and non-systematic?

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Financial Management: Listed below are the characteristic lines and correlations
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