Question: Here is the excel link, https://docs.google.com/spreadsheets/d/1pba8nBPSkogGwJBmzBeckIXwBbXRIfZrf7hbADBS8iw/htmlview 8. Use the sheets of RM RF and (8_10_Portfolios Prior from the file Data.xlsx. There are 10 portfolios formed

Here is the excel link, https://docs.google.com/spreadsheets/d/1pba8nBPSkogGwJBmzBeckIXwBbXRIfZrf7hbADBS8iw/htmlview

8. Use the sheets of "RM RF" and "(8_10_Portfolios Prior" from the file "Data.xlsx". There are 10 portfolios formed on the variable, Prior, from lowest (Lo PRIOR) to the highest (Hi PRIOR), and their portfolio returns are reported. RM and RF refer to the return on the market portfolio and the risk-free rate, respectively. Note that numbers for all returns provided in the file are reported in percentage. No points are given without showing calculation steps or giving detailed explanation. + a. Graph the security market line for the 10 portfolios (5 marks) and discuss the results. (2 marks)+ b. Construct the long-short hedge portfolio, Hi PRIOR- Lo PRIOR. Can CAPM explain its performance? (3 marks)+

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