Question: True/False 6. Geometric Mean is always equal or lower than the Arithmetic Mean 7. The Capital Asset Pricing Model (CAPM) is a model that describes
True/False
6. Geometric Mean is always equal or lower than the Arithmetic Mean
7. The Capital Asset Pricing Model (CAPM) is a model that describes the relationship between the expected return and risk of investing in a given security. It shows that the expected return on a security is equal to the risk-free return plus a risk premium, which is based on the beta of that security.
8. Aggregate Indices (i.e. S&P 500) are important benchmark tools to evaluate performance of securities as well as derive relative market pricing.
9. The Modern Portfolio Theory (MPT) is a not a helpful method for risk-averse investors to construct diversified portfolios that maximize their returns.
10. The Dow Jones Industrial Average (DJIA) is a security market capitalization-weighted index.
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