True or false a A 1,000 investment in the market portfolio combined with a 500 investment in the risk free security will have a CAPM beta of 2 b The risk premium on the market portfolio of shares has always been 5 per cent c The CAPM states that systematic risk is the only factor influencing return...

True or false? a. A 1,000 investment in the market portfolio combined with a 500 investment in

Question:

True or false?
a. A £1,000 investment in the market combined with a £500 investment in the risk-free security will have a CAPM-beta of 2.
b. The risk premium on the market of shares has always been 5 per cent.
c. The CAPM states that systematic risk is the only factor influencing returns in a diversified Beta has proved to be an excellent predictor of share returns over the past thirty years.
e. Investors expect compensation for risk factors other than beta such as macroeconomic changes.
f. The arbitrage pricing theory assumes unsystematic risk as a key input factor.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...