Question: Consider the CAPM with aggregate human capital returns from equation (21) of Lecture 4: a. If the market beta of the returns to human capital

 Consider the CAPM with aggregate human capital returns from equation (21)

Consider the CAPM with aggregate human capital returns from equation (21) of Lecture 4: a. If the market beta of the returns to human capital to market returns was zero, H=0, what would be the human-capital extended CAPM? b. What is the slope of the Security Market Line if H=0 ? c. Would two stocks with the same market beta, but one has positive covariance with aggregate returns to human capital, and the other has a zero covariance with aggregate returns to human capital, both have the same expected return? Explain. Consider the CAPM with aggregate human capital returns from equation (21) of Lecture 4: a. If the market beta of the returns to human capital to market returns was zero, H=0, what would be the human-capital extended CAPM? b. What is the slope of the Security Market Line if H=0 ? c. Would two stocks with the same market beta, but one has positive covariance with aggregate returns to human capital, and the other has a zero covariance with aggregate returns to human capital, both have the same expected return? Explain

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