Question

We use the Capital Asset Pricing Model to calculate prices of capital assets. a. True b....

We use the Capital Asset Pricing Model to calculate prices of capital assets.

a. True

b. False

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Answer #1

CAPM is the required retrun of an investor on a security in the market. So, it used to calculate the value of a security in the market. i.e. Stock. So the statement in FALSE because capital assets includes the homes, cars, property and securtity and CAPM is not used to find the value of all capital assets but only one of the capital Asset i.e. Security or specifically Stocks of any companies.

** If Capital Assets had covered only the stock,  then the statment would have been TRUE.

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