Suppose that in place of the S&P 500, you wanted to use a broader market portfolio of
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Suppose that in place of the S&P 500, you wanted to use a broader market portfolio of all U.S. stocks and bonds as the market proxy. Could you use the same estimate for the market risk premium when applying the CAPM? If not, how would you estimate the correct risk premium to use?
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No the expected return of this portfolio would be lower due to bonds Compute the histo...View the full answer
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