The two conditions in which the market portfolio may not be an important portfolio. Introduction: Risk-free rate is the optimal rate on an investment that can be attained deprived of acquiring any risk whereby the stockholder is guaranteed of getting both the original principal and a marginal profit during the specified time period. Market risk premium is estimated by initially discovering the expected return of an asset or a portfolio.

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Chapter 13, Problem 5P

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To determine: The two conditions in which the market portfolio may not be an important portfolio.

Introduction: Risk-free rate is the optimal rate on an investment that can be attained deprived of acquiring any risk whereby the stockholder is guaranteed of getting both the original principal and a marginal profit during the specified time period. Market risk premium is estimated by initially discovering the expected return of an asset or a portfolio.

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