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Typically stocks are grouped into different indices according to their size and liquidity, e.g. a large cap index (such as DAX30) and a small- or

Typically stocks are grouped into different indices according to their size and liquidity, e.g. a large cap index (such as DAX30) and a small- or mid-cap index (such as MDAX). According to the CAPM, how does the market portfolio relate to those indices? Explain carefully.

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