What is the prediction of the CAPM with respect to the expected return on any security? 

Why is the variance of a portfolio of internationally diversified stocks likely to be lower than the variance of a portfolio of U.S. stocks? 

 Assuming that the expected yen return on the Nikkei 225 index is 5%, and its volatility is 18%, and the volatility of the euro/yen exchange rate is 9%, what is the volatility of the euro return on the Nikkei 225 index if the correlation between the Nikkei index's return in yen and changes in the euro/yen exchange rate is 0.15?

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1 The prediction of the Capital Asset Pricing Model CAPM with respect to the expected return on any security is that it can be calculated using the fo... View the full answer