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CAPM predicts a linear positive relationship between expected returns and betas. The beta measures the systematic risk exposure of a particular asset. Discussion Questions: 1)

CAPM predicts a linear positive relationship between expected returns and betas. The beta measures the systematic risk exposure of a particular asset.

Discussion Questions: 1) Discuss evidence that researchers have found to support the CAPM. 2) Theory is nice. However, how is CAPM used in real life?

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