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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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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