Question: This is my question (a) Your personal opinion is that security X has an expected rate of return of 0.11. It has a beta of

This is my question

(a) Your personal opinion is that security X has an expected rate of return of 0.11. It has a beta of 1.5. The risk-free rate is 0.05 and the market expected rate of return is 0.09. Based on the Capital Asset Pricing Model, discuss whether this security is under-, over- or fairly-priced and why. (b) Based on the return and risk profile of the four portfolios below, discuss which portfolio cannot lie on the efficient frontier as described by Markowitz? Portfolio Expected Return Standard Deviation 6% 8% 14% 35% 12% 14% 10% 22% (c) Draw a kinked capital allocation line (CAL) first. And then discuss what causes the line to be kinked

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