Quiz Ch 08 – T/F Negative Slope and CAPM Implications
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
True or false: When plotting a company’s returns against the market’s, a negative slope suggests, according to the CAPM, that the required rate of return on the stock for a diversified investor should be below the risk-free rate, given the anticipated continuation of the observed relationship.