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V. If the simple CAPM is valid, which of the situation in Tables below is possible? Explain. Consider each situation independently. (14 points) a) Portfolio

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V. If the simple CAPM is valid, which of the situation in Tables below is possible? Explain. Consider each situation independently. (14 points) a) Portfolio Expected Return Beta Market 10% 1 Stock A 89 1.2 b) Portfolio Risk Free Market Stock B Expected Return 10% 189 3396 Beta 0 1.0 223

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