Question: The abnormal return of a security derived from CAPM is positive(expected return get from CAPM -actual return which is given). a. What rational explanation could

The abnormal return of a security derived from CAPM is positive(expected return get from CAPM -actual return which is given).

a. What rational explanation could exist for the abnormal returns

b. Discuss one behavioural bias that could explain the positive abnormal return?

c. Discuss why rational investors may not have arbitraged this apparent profit opportunity?

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