Question: Please explain why D is the correct answer 6. If the simple CAPM is valid and all portfolios are priced correctly, which of the situations

Please explain why "D" is the correct answer 6. If the

Please explain why "D" is the correct answer

6. If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%. A) Portfolio A Market Expected Return Beta 10% 1.0 10% 1.0 B) Portfolio . Market Expected Standard Return Deviation 13% 10% 8% 18% C) Portfolio . Market Expected Return 13% 8% Beta 1.0 1.0 D) Portfolio . Market Expected Return 16.0% 10% Beta 2.2 1.0 a. Option A b. Option B c. Option C d. Option D

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