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Consider the following information: Portfolio Risk-free Market A Expected Return 10% 18 16 Standard Deviation 0 1.0 1.5 a. Calculate the return predicted by CAPM

Consider the following information: Portfolio Risk-free Market A Expected Return 10% 18 16 Standard Deviation 0 1.0 1.5 a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. Return % b. What the alpha portfolio A. (Negative value should ind ated by a minus sign.) Alpha % c. If the simple CAPM is valid, is the situation above possible? Yes O No

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