D Economic interpretation of CAPM Consider a market where all assumptions of the CAPM with interest rate 0=2% are satisfied. The market portfolio has an expected return of MP=12%. We compare three efficient portfolios with expected return of 1=7%,2=12%,3= 22%, respectively. 1. Compute the beta for each of the portfolios. 2. In the event of a market crash, which of the portfolio do you assume to have the smallest and which one to have the largest loss