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Thanks David.

Hi, These values are taken from the P1.T1.Amnec_Ch4.xls under the RAPM tab. Asset A - 50% Asset B - 50% Covariance (Port, Market) - 0.0135 Beta - 1.062 Expected Return (beta) - 10.4% ( calculated from SML i.e. Rf+Beta*(Rm-Rf) Expected return (checking) - 12.5% ( calculated by taking...

Thanks a lot David. Now it is clear.

Thanks for taking time out for this and yes I agree with you. I guess will have to wait till David replies to this

Hi, Under the SML tab in the provided excel sheet for CAPM I could not understand how Covariance (Port, Market) is calculated. Could anyone please help me in understanding the formulae used? Thanks