Used the term garbage-in-garbage out

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What did Jack Treynor mean when he used the term “garbage-in, garbage out?”

Treynor said: "The only thing investors should worry about is how much any asset contributes to the risk of the portfolio as a whole."

Sharpe said: "Sharpe declares at the end of his paper that "only the responsiveness of an asset's rate of return to the level of economic activity is relevant in assessing its risk."

Do you agree with these statements? Why or why not?

Sharpe said: "…unsystematic risk has little or no impact on the value of a stock."

Do you agree? Why or why not?

Does your professor agree? Why or why not?

Write the CAPM.

Based on the example presented in class, what is the problem with a negative beta stock?

What is Roll’s Critique of the CAPM?

Reference no: EM132028811

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