Adequate information: Portfolio Expected return Beta Risk free 10% 0% Market 18 1.0 Portfolio A 16 0.9 To determine: Whether the situations set forth in the question are possible if the simple CAPM stands valid. Introduction: Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

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Answer 1

Question

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

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Answer 2

Question

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

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Answer 3

Question

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

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Answer 4

Question

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

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Answer 5

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

Answer 6

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

Answer 7

Chapter 9, Problem 15PS

Summary Introduction

Adequate information:

Portfolio Expected return Beta

Risk free 10% 0%

Market 18 1.0

Portfolio A 16 0.9

To determine:

Whether the situations set forth in the question are possible if the simple CAPM stands valid.

Introduction:

Portfolio involves financial asset grouping viz. currencies, commodities, bonds, stocks and cash equivalents. It also comprises of fund counterparts such as closed funds, exchange traded funds and mutual funds. Non-publicly tradable securities such as private, art and real estate investment are also part of portfolios.

Answer 8

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Answer 9

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Answer 11

Ch. 9 - Prob. 1PS Ch. 9 - Prob. 2PS Ch. 9 - Prob. 3PS Ch. 9 - Prob. 4PS Ch. 9 - Prob. 5PS Ch. 9 - Prob. 6PS Ch. 9 - Prob. 7PS Ch. 9 - Prob. 8PS Ch. 9 - Prob. 9PS Ch. 9 - Prob. 10PS

Solution Summary: The author analyzes how the portfolio is overpriced and inconsistent with the Capital asset pricing model.

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Chapter 9 Solutions

Portfolio	Expected return	Beta
Risk free	10%	0%
Market	18	1.0
Portfolio A	16	0.9