Exercise 31.2.4 If an asset has a negative beta, the CAPM says its expected rate of return
Question:
Exercise 31.2.4 If an asset has a negative beta, the CAPM says its expected rate of return should be less than the riskless rate even if this asset is very risky with a large standard deviation. Why? (For example, we saw in Chap. 24 that IO strips earn less than the riskless rate despite their high riskiness.)
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial Engineering And Computation Principles Mathematics Algorithms
ISBN: 9780521781718
1st Edition
Authors: Yuh-Dauh Lyuu
Question Posted: