Question: Consider the following information: Portfolio Expected Return Beta Risk-free 5 % 0 Market 11.8 1.0 A 9.8 2.2 a.Calculate the the return predicted by CAPM

Consider the following information:

Portfolio Expected Return Beta
Risk-free 5 % 0
Market 11.8 1.0
A 9.8 2.2

a.Calculate the the return predicted by CAPM for a portfolio with a beta of 2.2.(Round your answer to 2 decimal places.)

Return %

b.What isthe alpha of portfolioA.(Negative value should be indicated by a minus sign.Round your answer to 2 decimal places.)

Alpha %

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

Yes
No

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