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  3. just need help with a reply to this post. thank yo

just need help with a reply to this post. thank you in advance! ...

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Finance

just need help with a reply to this post. thank you in advance! image
The article I chose is from Bloomberg.com titled 'A Stupid Question About Stocks Yields a Surprising Answer". This article talks about the capital asset pricing model or CAPM theory which describes the relationship between systematic risk and expected return for asset. University of Miami professor Alex Horenstein inquired about "how the capital asset pricing model affected stock returns" (Brown, 2019) Horenstein found that stocks with low alpha, which is the CAPM measure of risk performance, over a five year period did better over the following year than the ones with high alpha over the same period (Brown, 2019). It seems like everyone has a logic or plan as to how they pick their stock or diversify their portfolio but in reading this article and our book which states that a number of studies have raised concerns about the validity of CAPM (Brigham Houston, 2016 p289) it is a little clearer for me especially when I read from this article that through this "someone has demonstrated that investors pick stocks using academic research that stock picking is useless (Brown, 2019)

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