Quiz Ch 07 – Evaluation of Securities in CAPM
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What classification does security receive under the capital asset pricing model, depending on its __________?
What classification does security receive under the capital asset pricing model, depending on its __________?
For which factor are investors NOT compensated in the context of the CAPM?
What anticipated return characterizes the risky-asset portfolio with minimum variance?
After adjusting for firm size and the ratio of the firm’s book value to market value, how did Fama and French describe the significance of beta?
Which factor/s according to Fama and French are deemed more effective in explaining stock returns as compared to beta?
What is the designated term for the graphical representation illustrating the correlation between expected return and beta within the CAPM framework?
How would an increase in risk aversion among all investors affect the Security Market Line (SML) and stock prices?
In an index model, what metric serves as an indicator of unsystematic risk?
What conclusion can be drawn from the regression analysis regarding the stock?
What conclusions can be drawn about betas based on empirical results from historical data?