Question: Please only answer the question (d). Thx Conser the followmg mformatlon a5out two stocks, Ella and Umega: The correlation between the two securities returns is

Please only answer the question (d). Thx

Conser the followmg mformatlon a5out two stocks, Ella and Umega: The correlation between the two securities returns is 0.25 (a) Calculate the expected return and standard deviation of the following four portfolios: (8 marks) (b) Explain why, under the CAPM framework, the standard deviation of an asset's returns is not a good measure of risk. (4 marks) (0) Under the CAPM framework, what is the tangency portfolio? What is the security market line? Support your answer with graphical evidence. (6 marks) (d) Discuss the problems with empirically testing the Capital Asset Pricing Model. (7 marks)

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