# Math

posted by .

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 -

## Similar Questions

1. ### Math

Stock Market History a. What was the average rate of return on large U.S. common stocks from 1900 to 2001?
2. ### Economics

How does increasing or decreasing the quantity of capital goods produced this period affect next period's production possibilities curve and why?
3. ### Economics

How does increasing or decreasing the quantity of capital goods produced this period affect next period's production possibilities curve and why?
4. ### Investment

Capital asset pricing theory asserts that portfolio returns are best explained by ________ risk.
5. ### biology

In trisomy 21, most nondisjunction events take place during female meiosis rather than male meiosis. What might be one factor that can account for this difference?
6. ### economics

(Growth and the PPF) Use the production possibilities frontier (PPF) to demonstrate economic growth. a. With consumption goods on one axis and capital goods on the other, show how the combination of goods selected this period effects …
7. ### money and banking

use capital asset pricing model to predict the return next year stock, return holding stocks to be 12% on average, the interest rate on 3 month t-bills will be 2%. calculate a stock with a beta of -0.3, 0.7, and 1.6. show three separate …
8. ### Managerial Finance

Assume that investors have recently become more risk averse, so the market risk premium has increased. Also, assume that the risk-free rate and expected inflation have not changed. Which of the following is most likely to occur?
9. ### Finance:capital budget

I am suppose to write a 1400 word paper based on the purchase of three new trucks costing \$30,000 each and \$10,000 of equipment for each one, with the life expansion of the trucks to be 5 years by calculating the firms' required return …
10. ### Statistics

Profitability remains a challenge for banks and thrifts with less than \$2 billion of assets. The business problem facing a bank analyst relates to the factors that affect return on assets(ROA), an indicator of how profitable a company …

More Similar Questions