Question: If the CAPM is valid, which of the following conditions is possible? Describe.
|
Portfolio
|
Expected Return
|
Beta
|
|
A
|
.20
|
1.4
|
|
B
|
.25
|
1.2
|
|
Portfolio
|
Expected Return
|
Beta
|
|
A
|
.30
|
0.35
|
|
B
|
.40
|
0.25
|
|
Portfolio
|
Expected Return
|
Beta
|
|
Risk Free
|
.10
|
0
|
|
Market
|
.18
|
.24
|
|
A
|
.16
|
.12
|
|
Portfolio
|
Expected Return
|
Beta
|
|
Risk Free
|
.10
|
0
|
|
Market
|
.18
|
.24
|
|
A
|
.20
|
.22
|