Reference no: EM132029076
1. In the capital asset pricing model, the market risk premium is best approximated by:
A. The most recent one – year return on the SNP 500 index, or another market index
B. The Long – term historic return on a stock market index such as the S&P 500, or another market index
C. The Long – term average spread of the S&P 500, or another market index, over the yield of Long- term government bonds
D. The return of the S&P 500, or another market index, over the current yield of long term government bonds
2. One reason why we are not concerned with idiosyncratic risk – also called firm specific risk – is that:
A. Most risk is not firm specific, so ignore
B. Through hedging insurance, investors me know invest in stocks with almost no risk exposure of any kind
C. It is easy and almost costless to diversify once per folio and Eliminate idiosyncratic risk
D.Investing in bonds can offset the idiosyncratic risks of shares of stock
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Decision produced strong ethical intensity
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The market risk premium is best approximated by
: In the capital asset pricing model, the market risk premium is best approximated by:
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