What is some evidence contradicting CAPM? Historically, low-beta stocks performed similarly to high-beta stocks Market Risk Premium continuing to fluctuate According to CAPM, expected return on some securities is lower than risk-free rate There's been evidence of stocks with negative Beta Imagine a conglomerate with three divisions. Division A's assets have a beta of 0.5; division B's assets, a beta of 1.0; and division C's assets, a beta of 1.5. If the company uses the average, 1.0, when valuing projects for all its divisions, which division will the company overinvest in? A and C will overinvest Division B Division A It will not overinvest Division C