Question: diversifiable risk C. systematic risk, nondiversifiable risk D. unique risk, nondiversifiable risk 9. If the simple CAPM is valid and all portfolios are priced correctly,

diversifiable risk C. systematic risk, nondiversifiable risk D. unique risk, nondiversifiable risk 9. If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below are possible? Consider each situation independently and assume the risk-free rate is 5 %. A) Portfolio Expected Return Beta A 15% 15% 1.2 Market 1.0 ) Portfolio Expected Return Standard Deviation A 20% 12% 15% Market 20% C) Portfolio Expected Beta Return 20% 1.2 A 15% 1.0 Market D) Portfolio Expected Return Beta 2.5 30% A 1.0 Market 15% A. Opiton B B. Opiton A. C. Opiton C D. Opiton D

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