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In the Capital Asset Pricing Model, the market risk premium is estimated over a long period of time because: more data is always better than less. a longer holding period gives a more reliable estimate because it is, in effect, a larger sample size. almost all investors hold stocks for many years, so it matches their investment horizon. historical returns are the best indicators of future returns.

  • Math - ,

    Mark, Alisha, Jasmine -- please use the same name for your posts.

    Also -- your questions and answer choices would be a lot easier to read if you put each choice on a separate line and identified them as a, b, c, d.

  • Math - ,

    In the Capital Asset Pricing Model, the market risk premium is estimated over a long period of time because:

    A. more data is always better than less.

    B. a longer holding period gives a more reliable estimate because it is, in effect, a larger sample size.

    C. almost all investors hold stocks for many years, so it matches their investment horizon.

    D. historical returns are the best indicators of future returns.

  • Math - ,

    B.

    http://www.investopedia.com/terms/c/capm.asp

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