What Does It Mean When the CAPM Is Called "Robust

question 51

Multiple Choice

What does it mean when the CAPM is called "robust?"

• A)The CAPM requires no assumptions.
• B)Even if most of the assumptions of the CAPM are relaxed,most of the conclusions will still hold.
• C)The CAPM is based on realistic assumptions.
• D)No other model can represent stock returns better than the CAPM.

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Definitions:

Bureau of Labor Statistics

A U.S. government agency responsible for collecting and analyzing important economic data, including unemployment, labor productivity, and price indexes.

Demand Fall

A decrease in the quantity of a product or service that consumers are willing and able to purchase at various prices, typically resulting in lower prices.

Labor-saving Technological Change

It refers to innovations or advancements in technology that reduce the amount of labor required to produce goods or services, often leading to increased productivity.

Telephone Operators

Individuals responsible for assisting customers in making telephone connections, including placing and connecting calls or providing information.