Which of the following statements is TRUE? Group of answer choices Securities are in equilibrium...
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Finance
Which of the following statements is TRUE? Group of answer choices
Securities are in equilibrium when the ratio of the contribution to the market's risk premium divided by the contribution to the market's variance is the same for all stocks.
None of these statements are true.
According to CAPM, a stocks fair value return depends on its total risk as measured by standard deviation.
Microsoft, Apple, Google & FaceBook have delivered returns in excess of their CAPM return over time (i.e. they delivered positive alphas). This evidence disproves the semi-strong form of EMH.
In the CAPM regression, beta is the y-intercept and alpha is the slope of the best-fit regression line.
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