According to the Capital Asset Pricing Model (CAPM), beta is the measure of systematic risk used to calculate the cost of capital for project selection. Beta represents an asset's sensitivity to changes in the market and is determined as the co-variance of the stock return with the market portfolio. Based on the definition, the market has a beta of 1 , and everything else is measured in relation to it. Based on the information provided, is it possible that a risky asset could have a beta of zero? What is the expected return on such an asset as per the CAPM? Is it possible for a risky asset to have a