Question: In the CAPM world, two securities, A and B, are priced efficiently, i.e., they fall on the SML. The expected return of A is 20%,

In the CAPM world, two securities, A and B, are priced

In the CAPM world, two securities, A and B, are priced efficiently, i.e., they fall on the SML. The expected return of A is 20%, and its beta is 1.6. The expected return of B is 11%, and its beta is 0.7. The expected return of the market portfolio is and the risk free rate is . O A. 14% and 4% O B. 18% and 6% O C. 16% and 6% O D. 15% and 6% O E. 15% and 5%

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