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Which of the following is FALSE regarding advantages and disadvantages of the SML or CAPM?

Which of the following is FALSE regarding advantages and disadvantages of the SML or CAPM?

Essentials Of Investments
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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Which of the following is FALSE regarding advantages and disadvantages of the SML or CAPM? ) The model does NOT consider systematic risk. ) The model relies on the past to predict the future, which is not always reliable. The model is applicable to all companies, as long as beta is available. () The user must estimate the expected market risk premium, which varies over time. A company's beta can vary over time. Next Page Page 30 of 30 Previous Page Submit Quiz O of 30 questions saved
Transcribed Image Text:Which of the following is FALSE regarding advantages and disadvantages of the SML or CAPM? ) The model does NOT consider systematic risk. ) The model relies on the past to predict the future, which is not always reliable. The model is applicable to all companies, as long as beta is available. () The user must estimate the expected market risk premium, which varies over time. A company's beta can vary over time. Next Page Page 30 of 30 Previous Page Submit Quiz O of 30 questions saved
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