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NEW QUESTION: 1
Without violating the rules of CAPM, which of the following strategies may be undertaken in an attempt to earn a return that's greater than that of the market?
A. Purchase securities whose correlation coefficient with that of the market is greater than one.
B. Short sell securities that have a beta of less than one and purchase the market portfolio.
C. Purchase securities that have a higher standard deviation than that of the market.
Answer: B
Explanation:
Short selling is a form of borrowing . Therefore by borrowing to invest in the market portfolio, you increase the leverage in the portfolio and consequently, its beta. However, according to CAPM, this higher beta should lead to higher expected returns.
NEW QUESTION: 2
Are the following display plans?
A. normal
B. analyze
C. verbose
D. pretty
Answer: A,D
NEW QUESTION: 3
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Answer:
Explanation:
check the answer below.
Explanation
Use the following settings for answer this simulation question.
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