Question: We now know about the CAPM formula and its uses. So, from your experience which of the statement is correct? Multiple Choice only few managers

We now know about the CAPM formula and its uses. So, from your experience which of the statement is correct?

Multiple Choice

  • only few managers use CAPM in practice to estimate the cost of capital.

  • using the CAPM investor can predict future stock prices.

  • CAPM predicts that investors are concerned only with the risk that cannot be diversified away.

  • CAPM would predict the performance of value stocks.

  • CAPM is a good measure to calculate risk of stock.

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