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plz answer the true false questions (a) In the CAPM world, individuals can both borrow and lend (b) The CAPM model states that the expected
plz answer the true false questions
(a) In the CAPM world, individuals can both borrow and lend (b) The CAPM model states that the expected excess return on any individual asset is proportional to the expected excess return on the market portfolio (c) The CAPM model assumes all of the following: (0) Returns on equities can be modeled as a single factor regression, in which the independent factor is the "Market" portfolio (ii) There are no "Industry" factors (iii) The error term for a given equity in the single factor regression model is uncorrelated with the market factor, and also uncorrelated with the error terms of other equities that are modeled using CAPM (iv) The "factor weight" or "beta" in the CAPM model is constant over time (d) A portfolio of securities with a beta equal to zero ought to earn a zero rate of return according to the CAPM. (e) In a CAPM world, all individuals have similar levels of risk preference in their portfolios. (9) The CAPM suggests that firm-specific risk can be diversified away Step by Step Solution
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