Question 3 A stock has an HPR of 8.7% and a CAPM return of 10.5%. Which of the following is true? You should short the stock because it is undervalued. You should buy the stock because it is overvalued. You should buy the stock because it is undervalued. You should short the stock because it is overvalued. QUESTIOn 4 Beta can change over time and can be different between sources. Which of the following is not a reason why betas may be different depending on the source? Beta is based on historical values. Beta may be calculated using dfferent periodicities, such as monthly, weekly, or daily. The market benchmark may differ.
Question 3 A stock has an HPR of 8.7% and a CAPM return of 10.5%. Which of the following is true? You should short the stock because it is undervalued. You should buy the stock because it is overvalued. You should buy the stock because it is undervalued. You should short the stock because it is overvalued. QUESTIOn 4 Beta can change over time and can be different between sources. Which of the following is not a reason why betas may be different depending on the source? Beta is based on historical values. Beta may be calculated using dfferent periodicities, such as monthly, weekly, or daily. The market benchmark may differ.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 3 A stock has an HPR of 8.7% and a CAPM return of 10.5%. Which of the following is true?
- You should short the stock because it is undervalued.
- You should buy the stock because it is overvalued.
- You should buy the stock because it is undervalued.
- You should short the stock because it is overvalued.
QUESTIOn 4
Beta can change over time and can be different between sources. Which of the following is not a reason why betas may be different depending on the source?
- Beta is based on historical values.
- Beta may be calculated using dfferent periodicities, such as monthly, weekly, or daily.
- The market benchmark may differ.
- Beta may be calculated using 3 years of data instead of 5 years of data.
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