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Why is a Single Index (Single Factor) Model consistent with the CAPM?

Define the alpha of a security. What is the average alpha of the market?

How does the market reach a stable equilibrium if the single index model holds?

Discuss economic factors that drive securities returns in the APT model (Chen, Roll, and Ross 1986)

Discuss the factors that drive securities returns in the Fama-French three factor model (Fama and French 1993).

Reference no: EM133058562

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