Please answer both questions:

1.

If the CAPM is valid, is the situation below possible?

Portfolio	Expected Return	Standard Deviation
Risk free	9.60%	0.00%
Market	17.28%	23.04%
A	15.36%	11.52%

		Possible
		Can not be determined
		Not Possible

2.

On Monday morning you sell one June T-bond futures contract at $97,843.75. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to answer the following questions.

Day		Settle
Monday	$	97,406.25
Tuesday	$	98,500.00
Wednesday	$	100,000.00

At the close of day on Tuesday your cumulative rate of return on your investment is ________.

		5.8%
		None of the choices
		24.3%
		2.2%
		16.2%