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Assume that the CAPM holds. 1.1. Indicate whether the follow

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Assume that the CAPM holds. 1.1. Indicate whether the following… Assume that the CAPM holds.??.1. Indicate whether the following statements are true or false based on what you can infer from the graph above without scaling it.Portfolio q has no diversifiable risk.?Portfolio q is a portfolio in which we have invested positive amounts both in the risk free asset and in the market portfolio.Security i has no systematic risk..?< ?qM <11.2. Work out answers to the following based on the graph above.You are given that? What percentage of the total risk of Security j as measured by the variance on returns on Security j can be diversified away?You are given that? What is the correlation between returns on Security k and those on the market portfolio?You are given that Security h lies at the intersection of a horizontal line going through Security j and a vertical line going through Security k. What percentage of the total risk of Security h as measured by the variance on returns on Security h cannot be diversified away?You are given that? What is the ratio of the dollar amount borrowed on margin to the total amount invested in the market portfolio in Portfolio a?2. Suppose the standard deviation of the returns on the market portfolio is 15%. Stock XYZ has an expected return of 14%. The covariance between the returns on XYZ and those on the market portfolio is 0.0279. The expected return on stock ABC is 15.5% with a standard deviation of 24%. Further, we are given that 81% of ABC's risk is undiversifiable and that ABC is positively correlated with the market. Assuming that the CAPM holds, work out the risk premium on the market portfolio.Image transcription textPortfolio a Security k 0 (Market Portfolio) Portfolio q Security j Security i OF... Show moreBusinessFinanceUGBA 103

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