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Université Bordeaux 1 *

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Economics

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Nov 24, 2024

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docx

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1

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96. In a scenario of economic downturn, how might investors adjust their use of CAPM for portfolio management? a) By increasing reliance on beta values b) By decreasing the market risk premium c) By shifting focus from systematic risk to specific risk d) By eliminating the risk-free rate from the calculation Section 25: Behavioral Biases in Investment Decisions 97. How might behavioral biases, such as overconfidence, impact the use of CAPM in making investment decisions? a) Overconfidence has no impact on CAPM b) Overconfidence may lead to underestimation of beta values c) Overconfidence may lead to overestimation of beta values d) Overconfidence is only relevant to specific risk 98. In the context of loss aversion, how might investors adjust their risk assessments based on CAPM? a) By increasing beta values b) By decreasing beta values c) By focusing solely on specific risk d) By using alpha values to assess loss aversion impact Section 26: Market Efficiency and CAPM 99. How might the assumption of market efficiency be challenged in the application of CAPM? a) Market efficiency has no impact on CAPM b) Inefficient markets lead to overestimation of beta values c) Efficient markets support accurate estimation of beta values d) Inefficient markets eliminate the need for beta values 100. In a scenario where markets are deemed highly efficient, how might investors adapt their use of CAPM? a) By relying on historical data exclusively b) By incorporating real-time market data into the analysis c) By eliminating the need for beta values d) By ignoring the risk-free rate in the calculation
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