Portfolio Actual return Standard deviation Beta

X 10.2% 12% 1.2

Y 8.8% 9.9% 0.8

Additionally, the risk premium for the market portfolio is 5% and the risk-free rate is 4.5%.

Required:

a. For both Portfolio X and Y, calculated the expected returns using the CAPM.

b. Evaluate the performances of Portfolio X and Y using your answers from Part a and the information given in the table above.

(PLEASE ANSWER BOTH A AND B)