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According to the CAPM stocks with Betas greater than 1 are expected to provide returns better...

According to the CAPM stocks with Betas greater than 1 are expected to provide returns better than the market. True/False?

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Answer #1

  

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According to the CAPM stocks with Betas greater than 1 are expected to provide returns better than the market.

Beta more than 1 means the movement of the stock will be more than the movement of the market but that does not mean that the return will be better as when the market falls the stock will fall more also.

Answer = FALSE.

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