Asked by Mark
In the Capital Asset Pricing Model, the market risk premium is estimated over a long period of time because: more data is always better than less. a longer holding period gives a more reliable estimate because it is, in effect, a larger sample size. almost all investors hold stocks for many years, so it matches their investment horizon. historical returns are the best indicators of future returns.
Answers
Answered by
Ms. Sue
Mark, Alisha, Jasmine -- please use the same name for your posts.
Also -- your questions and answer choices would be a lot easier to read if you put each choice on a separate line and identified them as a, b, c, d.
Also -- your questions and answer choices would be a lot easier to read if you put each choice on a separate line and identified them as a, b, c, d.
Answered by
Mark
In the Capital Asset Pricing Model, the market risk premium is estimated over a long period of time because:
A. more data is always better than less.
B. a longer holding period gives a more reliable estimate because it is, in effect, a larger sample size.
C. almost all investors hold stocks for many years, so it matches their investment horizon.
D. historical returns are the best indicators of future returns.
A. more data is always better than less.
B. a longer holding period gives a more reliable estimate because it is, in effect, a larger sample size.
C. almost all investors hold stocks for many years, so it matches their investment horizon.
D. historical returns are the best indicators of future returns.
Answered by
Ms. Sue
B.
http://www.investopedia.com/terms/c/capm.asp
http://www.investopedia.com/terms/c/capm.asp
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