As per CAPM, expected return = risk free return + Beta^(market return-risk free return) Req return=5+1.5 (10-5) = 12.5% 4. Assuming the CAPM holds, what is the expected return on an efficient portfolio with 4) a standard deviation of 50%? a 12.5% b) 15.0 % 17.5 % d) None of the above 5. What is the alpha, relative to the CAPM, of a portfolio with a beta of 0.5 and an expected return of 6%? a) 1.5% b) 1.0 % c) -1.5 % d) None of the above I As per CAPM, expected return = risk free return + Beta^(market return-risk free return) Req return=5+1.5 (10-5) = 12.5% 4. Assuming the CAPM holds, what is the expected return on an efficient portfolio with 4) a standard deviation of 50%? a 12.5% b) 15.0 % 17.5 % d) None of the above 5. What is the alpha, relative to the CAPM, of a portfolio with a beta of 0.5 and an expected return of 6%? a) 1.5% b) 1.0 % c) -1.5 % d) None of the above