# Markowitz w/ riskless asset & CAPM

If risk free rate ($R_0$) is bigger than expected return on minimum variance portfolio ($\bar{\mu}$), so $R_0>\bar{\mu}$. I.e. the tanget portfolio is on the risky inefficient portfolio frontier and we want to short sell risky portfolio. Question 1: Why is this not consistent with CAPM? Question 2: Is it consistent with general notion of securities market equilibrium??

• What do you think and why? – Matthew Gunn Jun 4 '18 at 19:22