Question: . Based on tbelow information: Portfolio A Portfolio B Systematic Risk (beta) 1.0 1.0 Specific risk for each individual security High Low Required: Briefly explain

. Based on tbelow information:

	Portfolio A	Portfolio B
Systematic Risk (beta)	1.0	1.0
Specific risk for each individual security	High	Low

Required:

Briefly explain whether investors should expect a higher return from holding Portfolio A versus Portfolio B under capital asset pricing theory (CAPM). Assume both portfolios are fully diversified. (15 marks)

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