FREE Trial

According to the CAPM, what assets are included in the market portfolio, and what are the relative weightings? In empirical

Question:

According to the CAPM, what assets are included in the market portfolio, and what are the relative weightings? In empirical studies of the CAPM, what are the typical proxies used for the market portfolio? Assuming that the empirical proxy for the market portfolio is not a good proxy, what factors related to the CAPM will be affected?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 63% (11 reviews)

The market portfolio contains all risky assets available If a risky asset be it an obscure bond or r…View the full answer


answer-question
Answered By
tutor-profile-image
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+ 1+ Reviews 10+ Question Solved
Related Book For  answer-question
Investment Analysis and Portfolio Management

Investment Analysis and Portfolio Management

ISBN: 978-0538482387

10th Edition

Authors: Frank K. Reilly, Keith C. Brown

See More Books
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: December 17, 2014 10:37:21
See More Questions

Students also viewed these Accounting questions

Q:
Summarize why a current telephone directory is not a good source from which to develop a sampling frame for most research studies.
A:
The current telephone directory is a less than adequate source from which t......
Q:
1. Explain why the income statement is not a good representation of cash flow. 2. Given the tax rates as shown, what is the average tax rate and marginal tax rate for a firm with taxable income of...
A:
A Net cash flows are different than Income statement Net cash flows are pure net cash of an entity T......
Q:
Empirical studies show that the market labor supply of prime-age males (between the ages of 25 and 55) in the United States is close to perfectly inelastic with respect to the labor compensation. If...
A:
The excess burden is not zero because a perfectly inelastic market labor supply me......
Q:
1. Evaluate the term "health" and the historical perspective on health promotion. 2. Examine health promotion and illness prevention teaching based on teaching principles, varied teaching learning...
A:
Health Promotion Discrimination on the basis of racism has been a hindrance factor in the growth and development of the American economy for the last century This has majorly involved a physical and e......
Q:
Recall that a conflict of interest scenario was presented to a sample of 205 marketing researchers and that 111 of these researchers disapproved of the actions taken. a. Let p be the proportion of...
A:
a b C d Hop 5 versus Ha p 50 111 p 5415 205 5415 5 5 V205 10 1 282 Since......
Q:
A monopoly sells two products, of which consumers want only one. Assuming that it can prevent resale, can the monopoly increase its profit by bundling them, forcing consumers to buy both goods?...
A:
No If no consumers want the second product profits are reduced by bundling it with the first pro......
Q:
Modify MINIX 3 so that each process can explicitly set the scheduling priority of its children using a new system call setpriority with parameters pid and priority.
A:
Modifying the MINIX 3 operating system to allow processes to explicitly set the scheduling priority of their children involves making changes to the kernel and system call interface Below is a step by......
Q:
Software Distributors reports net income of $65,000. Included in that number is depreciation expense of $15,000 and a loss on the sale of land of $6,000. A comparison of this years and last years...
A:
Cash Flows from Operating Activities Net income 65 000 A......
Q:
A firm has earnings of $22,000 before interest, depreciation, and taxes. A new piece of equipment is installed at a cost of $11,000. The equipment will be depreciated over five years, and the firm...
A:
To calculate the earnings and cash flows for the firm in years 2 and 5 using the two methods of depreciation straight line and modified accelerated co......
Q:
Repeat the exercise in the preceding problem but let Y and X denote the male and female critical reading scores, respectively. Repeat exercise Refer to the SAT data given in Exercise 2.16. In...
A:
a The regression results are as follows Y i 132 778 0 750 X i se 33 724......
Q:
Draw an ideal SML. Based on the early empirical results, what did the actual risk-return relationship look like relative to the ideal relationship implied by the CAPM?
A:
In the empirical line low risk secur......
Q:
Some studies related to the efficient market hypothesis generated results that implied additional factors beyond beta should be considered to estimate expected returns. What are these other variables...
A:
The Studies of the efficient markets hypothesis suggest......
Q:
A CPA was engaged by Blackbird Company in 2015 to examine its books and records and to make whatever corrections are necessary. An examination of the accounts discloses the following. (a) Dividends...
A:
1 2 3 Retained Earnings Jan 1 2012 Dr Cr Explanation Reported retained......
Q:
Grand Bank is a mature bank, in stable growth. The bank is expected to report net income of $102 million and pay dividends of $88 million next year. If the book value of equity at the bank is $880...
A:
To estimate the value of equity in the book today you can use the Gordon Growth Model also known as......
Q:
Steel plate at the top is held by 3 columns. The cross section area for each column is 400 cm and its length is 200 cm. Before the load applied on top of the plate, due to mistake in production the...
A:
To determine the maximum allowable load on top of the steel plate we can use the formula for stress......
Q:
what circumstance does the Quicksort performance get poor? Briefly explain why the Quicksort slows down so much under this circumstance. And after that, describe a way to make it so that Quicksort...
A:
QuickSort s performance can degrade significantly under certain circumstances particularly when the......
Q:
Think about how to classify these different materials. Which physical property are you going to use to classify them? Put them in different groups. Materials...
A:
Materials Classification Based on Physical Properties Group 1 Materials with High Density 1 Iron 2 Silver 3 Steel Physical Property Density Reasoning......
Q:
You owe your friend each of the following cash flows: $9,000 1 year from today; $7,000 3 years from today; $2,000 8 years from today. How much do you need to deposit today into an account that pays...
A:
To calculate how much you need to deposit today to meet each of these future obligations you can......
Q:
Can partitioned join be used for r r.A s? Explain your answer
A:
Here we have an equi join condition which can be execut......
Q:
Hardin Services Co. experienced the following events in 2016: 1. Provided services on account. 2. Collected cash for accounts receivable. 3. Attempted to collect an account and, when unsuccessful,...
A:
Event Assets Liab Eq......
Q:
On January 1, 2012, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1....
A:
a January 1 2012 purchase entry Debt Investments Available for Sale 369 114 Cash 369 114 b The amort......
Q:
Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb. 1, 2012...
A:
a Debt Investments Available for Sale 162 000 Equity Investments Available for Sale 37 400 Interest......
Q:
Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Instructions(a) Indicate whether...
A:
a The bonds were purchased at a discount That is they were purchased at less than......
The Complete Dictionary Of Accounting And Bookkeeping Terms Explained Simply 1st Edition - ISBN: 1601383258 - Free Book