Consider the following information:

Portfolio	Expected Return		Beta
Risk-free	5	%	0
Market	12.4		1.0
A	10.4		1.7

a. Calculate the the return predicted by CAPM for a portfolio with a beta of 1.7. (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
	No