Quiz Ch 07 – Action for Stocks with Negative Alphas
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What is the recommended course of action for stocks displaying negative alphas?
What is the recommended course of action for stocks displaying negative alphas?
What percentage of financial managers employ CAPM for cost of capital estimation?
What aspect of risk does beta measure?
What value does research suggest that a firm’s beta tends to approach over time?
What beta value is assigned to the market portfolio?
What does the CAPM aim to achieve?
Who is credited with developing the capital asset pricing model?
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?