Question
Select all choices that apply. Points are earned for correct choices and deducted for incorrect choices. Your firms team of analysts estimates the CAPM beta
Select all choices that apply. Points are earned for correct choices and deducted for incorrect choices.
Your firms team of analysts estimates the CAPM beta of Snap, Inc. stock (SNAP) to be 1.20. According to the CAPM, it then follows that:
Group of answer choices
the expected return of SNAP is greater than the expected return of the market index
the expected return of SNAP is greater than the riskless rate
the non-diversifiable risk of SNAP is greater than that of the market index
the CAPM alpha of SNAP is expected to be positive
the CAPM alpha of SNAP is expected to be negative
the ratio of SNAPs expected risk premium to its standard deviation of return --- i.e., SNAP's Sharpe Ratio --- is less than that of the market index
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