Review assumptions of the capm

Reference no: EM131936515

Question: Assume that the assumptions of the CAPM hold. Is the following statement true or false? A stock cannot have an expected return that is equal the risk-free rate because a risk-averse investor would never hold such a stock in equilibrium. This investor would always prefer to hold the risk-free asset because it has the same average return as the stock, hut has zero variance.

Reference no: EM131936515

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