Question: Question 14 (2.5 points) If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each

Question 14 (2.5 points) 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 2.5%. A) Portfolio A Market Expected Return 17.5% 12.5% Beta 1.5 1.0 B) Portfolio A Market Expected Return 8.5% 10.0% Standard Deviation 18.0% 24.0% c) Portfolio A Market Expected Return 13.5% 10.0% Beta 1.2 1.0 D) Portfolio Market Expected Return 7.5% 10.0% Beta 0.6 1.0 Option D Option A Optionc Option B

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