Question: Consider the following information: Expected Standard Return Deviation 0 Portfolio Risk-free Market A Return a. Calculate the return predicted by CAPM for a portfolio with

Consider the following information: Expected Standard Return Deviation 0 Portfolio Risk-free Market A Return a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. Alpha 10% 18 16 1.0 1.5 b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign.) Yes O No % c. If the simple CAPM is valid, is the situation above possible? %

Market A Return a. Calculate the return predicted by CAPM for a

Consider the following information: a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5 . b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign.) c. If the simple CAPM is valid, is the situation above possible? Yes No Consider the following information: a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5 . b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign.) c. If the simple CAPM is valid, is the situation above possible? Yes No

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