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a. Briefly describe the main logic of the CAPM. How is beta coefficient defined and what does it capture? Explain why the market as a

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a. Briefly describe the main logic of the CAPM. How is beta coefficient defined and what does it capture? Explain why the market as a whole is the efficient portfolio. (8 marks) b. 'Our portfolio comprises just one security. If we want to increase the value of our portfolio, it is always better to add a new security instead of investing more on the existing security. Discuss. (6 marks)

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