Can someone please explain if there is an arbitrage opportunity, how to find it, and what it is. I understand that you use the trainer ratio and get 6% for A and 7.5% for , but what does it mean if E is higher. Does that mean that the portfolio is performing better? How would arbitrage come into play here? Is there an arbitrage opportunity? Sorry I'm just lost and want to do well in my course.

Consider the following data for a single-index economy. All portfolios are well diversifie3d. Suppose that another portfolio E is well diversified with a beta of 2/3 and an expected return of 9%. Is there an arbitrage opportunity? If so, what is it