Provide zero expected return

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Please state whether the statements below are true or false and explain why. Even in the case that the explanation is a formula, please explain what the formula is saying (what the symbols mean etc...)

A. the CAPM model predicts that a stock with a beta of 0 will provide zero expected return. True or false? Explain and show any calculation.

B. An investor who invests $10,000 in US treasury bills and $20,000 in a market portfolio will have a portfolio beta of 2 (two). True or false? explain and show any calculations

Reference no: EM133116058

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