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1. If the CAPM holds, in equilibrium which of the situations below are possible? Consider each situation independently. a. (Question 1) E[r] B 10% 0

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1. If the CAPM holds, in equilibrium which of the situations below are possible? Consider each situation independently. a. (Question 1) E[r] B 10% 0 1.0 16 1.5 DO NO 18 Portfolio 7 Market A E[r] 10% 18 16 0% 24 12 c. (Question 3) Portfolio ri Market A [r]. 8% 16 12 B 0 1.0 25

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