Why Have Researchers Criticized the Contingency Model

question 23

Essay

Why have researchers criticized the contingency model?

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Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Overpriced Securities

Securities deemed overpriced are trading at a price higher than their intrinsic or true value, often due to speculative activities or market anomalies.

Positive Alphas

Investments that have performed better than their benchmark indices, indicating they have generated excess returns adjusted for risk.

Betas

A measure of a stock's volatility in relation to the overall market, indicating its risk compared to the market average.