b. If you now use past returns to estimate the expected risk premium, will the inclusion of
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b. If you now use past returns to estimate the expected risk premium, will the inclusion of data for 2030 cause you to underestimate or overestimate the return that investors required in the past?
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PROBLEM SETS Chapter 7 Introduction to Risk, Diversification, and Portfolio Selection 213 Probability Payoff Net Profit 0.10 $500 $400 0.50 100 0 0.40 0 –100
c. Will the inclusion of data for 2030 cause you to underestimate or overestimate the return that investors require in the future?
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Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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