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Question 7 Answer all parts of this question: a) What are the assumptions and limitations of the Capital Asset Pricing Model (CAPM)? (12 marks) b)

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Question 7 Answer all parts of this question: a) What are the assumptions and limitations of the Capital Asset Pricing Model (CAPM)? (12 marks) b) If average returns are not increasing in securities systematic risk, can we conclude from this that capital markets are inefficient? Explain. (8 marks) [Total: 20 Marks]

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