Question: TRUE OR FALSE? REASON? If the market is efficient, an investment in any risky security will yield the same Treynor ratio. If the CAPM holds,

TRUE OR FALSE? REASON?

If the market is efficient, an investment in any risky security will yield the same Treynor ratio.

If the CAPM holds, the arithmetic average beta of all the assets in the market is 1.

Framing bias means that investors are too slow in updating their beliefs in response to evidence.

Purchasing a straddle option (i.e., both a put and a call on the stock) can fully hedge your stock investment because your profits will always be nonnegative.

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