MORE ACCURATE VERSION IN THE PICTURE: Consider the following data for a CAPM economy.

Asset E$[$r$]$ CAPM $\backslash$beta

A $0\mathrm{.}121\mathrm{.}2$

B $0\mathrm{.}060$

Problem. $($a$)$ What is the market premium $($excess market return$)$ of this economy?

Problem. $($b$)$ Suppose that there is another asset C with a CAPM $\backslash$beta of $2$ and expected return of $0\mathrm{.}15.$

Using assets A$,$ B$,$ and C$,$ construct a zero$-$investment arbitrage portfolio and tell me what your arbitrage

profit would be$.[$Hint: The weights will add up to be $0$ in a zero$-$investment arbitrage portfolio.$]$