1) There are only Asset X and asset B on the market, the expected return of x=3y+0.06, can we use the long-short strategy to earn a risk-free return?

2) CAPM relate risk to expected return for every security in the market, risk in CAPM is covariance. Suppose relationship between risk and return given by the security market line was linear, that is , E(Rx)=a+b*(SDmx), with both risk-free assets ad market portfolio lying on the SML

Use this to derive the CAPM equation.