Homework Answers
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Answer:
Risk free asset - X = 8-0/8+0 = 1
Market portfolio - X = 18-22/18+22 = -1/10
Portfolio B - X = 15-12/15+12 = 1/9
The reward to variability ratio for Portfolio B is greater than that of market and hence not possible according to CAPM (1/9 > abs(-1/10)
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