Which of the Following Statements Is True About Models That

question 13

Multiple Choice

Which of the following statements is true about models that attempt to measure the empirical performance of the CAPM?

• A) The conventional CAPM works better than the conditional CAPM with human capital.
• B) The conventional CAPM works about the same as the conditional CAPM with human capital.
• C) The conditional CAPM with human capital yields a better fit for empirical returns than the conventional CAPM.
• D) Adding firm size to the model specification dramatically improves the fit.
• E) Adding firm size to the model specification worsens the fit.

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Definitions:

Reference

The act of mentioning something or citing a source as evidence.

Because

The word "because" is used to indicate causality, reasoning, or explanation, giving the reason why something happened or justifying a statement.

Asserted

Stated confidently or declared as true without providing evidence or proof.

If

A conditional term used to stipulate a circumstance or requirement for a particular outcome or state to occur.