Consistency of covariance and CAPM inputs

The S&P 500 has expected return 16% and volatility 25%. Microsoft volatility is stated as 20% and covariance with the S&P 500 as 0.10. The risk-free rate is 6%. Intel’s expected return is half Microsoft’s. Portfolio weights are 0.25 Microsoft, 0.10 Intel, 0.75 S&P 500, −0.20 GM (beta 0.80), and 0.10 risk-free.

1. A.Check whether the inputs are jointly feasible.
2. B.Compute the formal CAPM results using the covariance as supplied.