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Empirically, the CAPM fails because some stocks have positive alpha, while other stocks have negative alpha. What can we conclude given the joint hypothesis problem?
Empirically, the CAPM fails because some stocks have positive alpha, while other stocks have negative alpha. What can we conclude given the joint hypothesis problem?
(a) The CAPM fails.
(b) Markets are inecient.
(c) The CAPM fails and markets are inecient.
(d) We cant say.
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