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If the simple CAPM is valid, which of the following situations are possible? Explain the reason. a. Portfolio Expected return Standard Deviation Risk-Free 10 0

If the simple CAPM is valid, which of the following situations are possible? Explain the reason.

a.

Portfolio Expected return Standard Deviation
Risk-Free 10 0
Market 20 25
A 18

15

b.

Portfolio Expected return Standard Deviation
Risk-Free 10 0
Market 20

1
A 18 0.9

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