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Consider the following information: Portfolio Expected Return Beta Risk-free 10 % 0 Market 10.8 % 1.0 A 8.8 & 0.6 a. Calculate the expected return
Consider the following information:
| Portfolio | Expected Return | Beta | |
| Risk-free | 10 | % | 0 |
| Market | 10.8 | % | 1.0 |
| A | 8.8 | & | 0.6 |
a. Calculate the expected return of portfolio A with a beta of 0.6. (Round your answer to 2 decimal places.)
b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
c. If the simple CAPM is valid, is the above situation possible?
y/n
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