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Portfolio ER Beta A 13% 1.3 Market 13% 1.0 B 16% 13% Market 11% 21% Porfolio ER BETA C 16% 1.3 Market 11% 1.0 D

Portfolio ER Beta
A 13% 1.3
Market 13% 1.0
B 16% 13%
Market 11% 21%
Porfolio ER BETA
C 16% 1.3
Market 11% 1.0
D 20.2% 1.9
Market 13% 1.0

If the simple CAPM is valid and all portfolios are priced correctly, which of the situations above is possible? Consider each situation independently and assume the risk free rate is 5%.

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