Question
1.Given fair pricing, the expected return equals the required return. True or False 2.Greater complexity ensures greater explanatory power, therefore multifactor models are superior to
1.Given fair pricing, the expected return equals the required return. True or False
2.Greater complexity ensures greater explanatory power, therefore multifactor models are superior to single-factor models in estimating costs of capital. True or False
3.Given fair pricing, the expected price appreciation return over an initial anticipated one-year holding period must be equal to the required return minus the dividend yield. True or False
4.You performed a regression analysis using 60 months of data comparing return for your subject company to that of the S&P 500. The slope of the regression line is 0.4872. Use the Blume method to calculate an adjusted beta. (Enter your answer as a number with four decimal places, like this: 0.1234)
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