Why does required returns (as calculated by the CAPM) not always coincide with realized returns? Markets are
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Question:
Why does required returns (as calculated by the CAPM) not always coincide with realized returns?
Markets are inefficient
Beta is estimated not observed
Constructing the true market portfolio is difficult in practice
Investors are not mean-variance optimizers
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324302691
11th edition
Authors: Eugene F. Brigham, ? Joel F. Houston
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