題組內容

4.The risk-free rate, average returns, standard deviations, and betas for Fund A, Fund B, the S&P 500 Index, and 1-month T-bill are provided. If we use the variance as a proxy of the total risk, the unsystematic risk can be obtained by subtracting the systematic risk from the total risk.
618336e96a966.jpg

(2) (4%) An investor is considering to include Fund A or Fund B in his existing portfolio which is well diversified. Which measure should the investor use to make the decision? What is his decision?