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In the Capital Asset Pricing Model (CAPM), explain in words (i.e. not using the formula) what beta measures, and why beta is considered to be
In the Capital Asset Pricing Model (CAPM), explain in words (i.e. not using the formula) what beta measures, and why beta is considered to be the appropriate risk measure. Also explain what kind of stocks (e.g. in which industry) generally have high betas, and in which case would an investor want to invest in stocks with high betas.
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