Quiz Ch 07 – CAPM Functionality
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What does the CAPM aim to achieve?
What does the CAPM aim to achieve?
What features do securities exhibit when considered fairly priced in the capital asset pricing model?
To the stock market, how does the systematic risk of a stock with a beta of 1.3 stands?
What are the likely outcomes if many investors opt to buy stocks, potentially driving up prices?
Which statements are accurate in a basic CAPM context?
Who is credited with developing the capital asset pricing model?
What criterion does the capital asset pricing model specify for securities to achieve equilibrium?
What determines the risk premium an investor anticipates on any stock or portfolio according to the CAPM?
What is a consistent characteristic of constructing a zero-investment portfolio?
Under what conditions does the possibility of arbitrage occur?