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In: Finance

Consider the following information: Portfolio Expected Return Beta Risk-free 7 % 0 Market 10.4 1.0 A...

Consider the following information:

Portfolio Expected Return Beta
Risk-free 7 % 0
Market 10.4 1.0
A 9.0 1.5

a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. (Round your answer to 2 decimal places.)

Return???

b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Beta???

c.  If the simple CAPM is valid, is the situation above possible?

Yes or No???

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 month ago
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