Reference no: EM133674287
Questions
1. What does CAPM stand for and what is its purpose?
2. What is the relationship between CAPM and systematic risk?
3. How does CAPM calculate the expected return on an investment?
4. What is the market risk premium, and how is it used in CAPM?
5. What is the beta coefficient, and how is it calculated and used within CAPM?
6. What are some limitations of CAPM?
7. How does CAPM provide insights into portfolio diversification?
8. What impact does a change in market risk have on the expected return according to CAPM?
9. How does the use of historical data affect CAPM calculations?
10. How can CAPM be used in capital budgeting decisions?
11. What role does the risk-free rate play in CAPM, and how is it determined?
12. Can CAPM be used to derive the cost of equity for private companies?
13. What is the CAPM equation, and how is it used in practice?
14. How can investors use CAPM to make more informed investment decisions?