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Consider the following information: Expected Portfolio Return Risk-free Market 11.0 10.0 7% Beta 0 1.0 1.8 a. Calculate the return predicted by CAPM for a

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Consider the following information: Expected Portfolio Return Risk-free Market 11.0 10.0 7% Beta 0 1.0 1.8 a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.8. (Round your answer to 2 decimal places.) Return % b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Alpha % c. If the simple CAPM is valid, is the situation above possible? Yes O No

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