True or false a The CAPM implies that if you could find an investment with a negative beta, its expected return would be less than the interest rate b The expected return on an investment with a beta of 2 0 is twice as high as the expected return on the market c If a stock lies below the security m...

True or false? a. The CAPM implies that if you could find an investment with a negative

Question:

True or false?
a. The CAPM implies that if you could find an investment with a negative beta, its would be less than the interest rate.
b. The on an investment with a beta of 2.0 is twice as high as the on the market.
c. If a stock lies below the security market line, it is undervalued.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...