Consider the following information:

Portfolio	Expected Return		Beta
Risk-free	10	%	0
Market	18		1.0
A	16		.9

a. Calculate the expected return of portfolio A with a beta of .9.

Expected return %

b. What is the alpha of portfolio A. (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.)

Alpha %

c. If the simple CAPM is valid, is the above situation possible?

	Yes
	No