If the simple CAPM is valid, which of the situations in problems 4-10 are possible?
If the simple CAPM is valid, which of the situations in problems 4-10 are possible?
Possible
Not Possible
4. Portfolio Expected Return Beta
A 0.20 1.4
B 0.25 1.2
5. Portfolio Expected Return Standard Deviation
A 0.30 .35
B 0.40 .25
6. Portfolio Expected Return Standard Deviation
Risk-Free 0.10 0
Market 0.18 .24
A 0.16 .12
7. Portfolio Expected Return Standard Deviation
Risk-Free 0.10 0
Market 0.18 .24
A 0.20 .22
8. Portfolio Expected Return Beta
Risk-Free 0.10 0
Market 0.18 1.0
A 0.16 1.5
9. Portfolio Expected Return Beta
Risk-Free 0.10 0
Market 0.18 1.0
A 0.16 0.9
10. Portfolio Expected Return Standard Deviation
Risk-Free 0.10 0
Market 0.18 .24
A 0.16 .22
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