Ef 323. If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situationindependently, and assume the risk-free rate is 5%.A)PortfolioAMarketB)PortfolioAMarketC)PortfolioAMarketD)PortfolioAMarketExpectedReturnExpectedReturnExpectedReturnExpectedReturnonly one is possibleBeta20 % 0.720StandardDeviation2318Beta%Beta1.0% 7 %%23 % 0.718 % 1.033.5 % 1.920 % 1.015 %

Capital Asset Pricing Model: It is a financial model that estimates an investment's or asset's…

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 B) Portfolio A Market Portfolio A Market D) Portfolio A Market Expected Return Expected Return Expected Return Expected Return only one is possible Beta 20 % 0.7 20 % 1.0 Standard Deviation 23 18 Beta % 7 % Beta % 15 % 23 % 0.7 18 % 1.0 33.5 % 1.9 20 % 1.0

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 B) Portfolio A Market Portfolio A Market D) Portfolio A Market Expected Return Expected Return Expected Return Expected Return only one is possible Beta 20 % 0.7 20 % 1.0 Standard Deviation 23 18 Beta % 7 % Beta % 15 % 23 % 0.7 18 % 1.0 33.5 % 1.9 20 % 1.0

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 13QTD

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