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- Present the Capital Asset Pricing Model (CAPM) and discuss how the theoretical model is made operational when going from the theory to the empirical practicepresent the capital asset pricing model and discuss how the theoretical model is made operational when going from the theory to the empirical practiceDiscuss the main features of Capital Asset Pricing Model (CAPM) and comment on the validity of the model in the real world.
- What is the Capital Asset Pricing Model and explain the variables used to calculate the required rate of return under this model?Answer all parts of this question.(a) Discuss the main assumptions of the Capital Asset Pricing Model (CAPM).What is the Capital Asset Pricing Model (CAPM)?What are some of its key assumptions? Has itbeen empirically verified? What is the role of theSecurity Market Line in the CAPM?