An analyst at capm research inc is projecting a return of

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An analyst at CAPM Research Inc. is projecting a return of 21% on Portfolio A. The market risk premium is 11%,the volatility of the market portfolio is 14%, and the risk-free rate is 4.5%. Portfolio A has a beta of 1.5. According to the capital asset pricing model, which of the following statements is true?

A. The expected return of Portfolio A is greater than the expected return of the market portfolio.

B. The expected return of Portfolio A is less than the expected return of the market portfolio.

C. The return of Portfolio A has lower volatility than the market portfolio.

D. The expected return of Portfolio A is equal to the expected return of the market portfolio.

Reference no: EM13568853

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