Question: If the simple CAPM is valid, is the situtation shown below possible? Portfolio Expected Return Standard Deviation Risk-free 7 % 0 % Market 16 %

If the simple CAPM is valid, is the situtation shown below possible?

Portfolio Expected Return Standard Deviation
Risk-free 7 % 0 %
Market 16 % 30 %
A 14 % 15 %

multiple choice

  • Possible

  • Not possible

Justify your response below

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