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Consider the following information: Portfolio Expected Return Beta ...

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Question

Finance

Consider the following information:

Portfolio Expected Return Beta
Risk-free 8 % 0
Market 11.4 1.0
A 9.4 0.9

a. Calculate the expected return of portfolio A with a beta of 0.9. (Round your answer to 2 decimal places.)

Expected return %

b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Alpha %

c. If the simple CAPM is valid, is the above situation possible?

Yes
No

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