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Nov 24, 2024

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86. How might the assumptions of CAPM impact its applicability to various investment scenarios? a) The assumptions limit the applicability of CAPM to specific industries b) The assumptions make CAPM universally applicable to all investments c) The assumptions challenge the relevance of CAPM in emerging markets d) The assumptions have no impact on the applicability of CAPM 87. In what scenarios might investors consider using alternative models instead of CAPM for valuation purposes? a) When there is a need for precise beta estimates b) When dealing with illiquid assets c) When the risk-free rate is constant d) When market risk is the sole consideration 88. How might investors incorporate a qualitative assessment of market conditions alongside quantitative tools like CAPM? a) By ignoring qualitative factors b) By relying solely on quantitative models c) By adjusting beta values based on market sentiment d) By assuming all qualitative factors are accounted for in beta estimates 89. How do changes in the economic environment impact the assumptions underlying CAPM? a) Changes in the economic environment have no impact on CAPM b) Changes may require adjustments to the risk-free rate and market risk premium c) Changes decrease the importance of beta values d) Changes only impact specific risk 90. In a rapidly changing market environment, how might investors adapt their use of CAPM to make more informed decisions? a) By relying on historical data exclusively b) By incorporating real-time market data into the analysis c) By ignoring short-term market fluctuations d) By eliminating the risk-free rate from the calculation

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