Question: Problem 3 . Essay type questions. ( 2 0 points ) ( a ) ( 1 0 points ) Why do we use rolling pre

Problem 3. Essay type questions. (20 points)
(a)(10 points) Why do we use rolling pre-ranking approach when constructing test portfolios in CAPM
(b)(10 points) Evaluate whether the following statement is accurate: "Stock A is risky, therefore expected return on this stock should be greater than the risk free rate , otherwise nobody would be willing to buy this stock:"
Problem 3 . Essay type questions. ( 2 0 points )

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