Assume that the zero-beta form of the capital asset pricing model (CAPM) is appropriate. What is the

Question:

Assume that the zero-beta form of the (CAPM) is appropriate. What is the differential return for the funds shown in Problem 1 if Rz = 4%?
In Problem 1

Assume that the zero-beta form of the capital asset pricing

Capital Asset Pricing Model
The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks. The CAPM is a model for pricing an individual security or portfolio. For individual securities, we make use of the security market line (SML) and its...