Question
Assume V and W are individual stocks correctly priced in CAPM equilibrium, with but . E(r V ) > E(r W ) because V has
Assume V and W are individual stocks correctly priced in CAPM equilibrium, with but .
| E(rV) > E(rW) because V has more firm-specific risk than W. | ||
| E(rV) = E(rW) even though V has more total risk than W. | ||
| It is possible E(rV) < E(rW) because investors ignore total risk in CAPM equilibrium |
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Principles Of Macroeconomics
Authors: Frank, Bernanke, Antonovics, Heffetz
3rd Edition
1259117162, 9781259117169
