Commonly used jargon in financial markets, such as beta and alpha, originate from asset pricing models. Describe,
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Commonly used jargon in financial markets, such as beta and alpha, originate from asset pricing models.
- Describe, the role played by alpha in an asset pricing model. (Worth 1 mark)
- Explain, the impact on the beta and unsystematic risk of a risky asset portfolio when more assets are added to the portfolio. (Worth 2 marks)
- Explain, how you can use the single index model when deciding on whether to buy or sell shares in CSL Limited. (Worth 2 marks)
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