Question: Which one is correct? If market is efficient, the prices of securities fully reflects new information even it will take time Under CAPM, for an

Which one is correct? If market is efficient, the prices of

Which one is correct? If market is efficient, the prices of securities fully reflects new information even it will take time Under CAPM, for an individual security, the premium depends on the level of both systematic and unsystematic risk If market is not efficient, sell high and buy low are rare CAPM assumes all investors will end up one risky portfolio called market portfolio The slope of SML is the amount of return per unit of diversifiable risk

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