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) 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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