Question: Question 3 (0) Derive the zero Beta CAPM. [50%] (ii) Assume the equilibrium equation shown below and assuming that the zero Beta model holds: i

Question 3 (0) Derive the zero Beta CAPM. [50%] (ii) Assume

Question 3 (0) Derive the zero Beta CAPM. [50%] (ii) Assume the equilibrium equation shown below and assuming that the zero Beta model holds: i = 0.02 + 0.08i (a) What is the return on the zero Beta portfolio? (b) What is the return on the market? [25%] [25%]

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