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Are statements below true or false? Explain your answer. a) (1 point) Assume that CAPM...

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Accounting

Are statements below true or false? Explain your answer. a) (1 point) Assume that CAPM holds. In January 2015 stock A had some expected return. In February 2015 risk-free rate increased compared to January 2015, but the expected market return and stock A beta stayed the same. It must be the case that the expected return on stock A increased in February 2015 compared to its expected return in January 2015. b) (1 point) If the stock market consists of only 1 stock, that stock must have a beta of 1.

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