Multiple Choice
The CAPM is not testable unless
A) the exact composition of the true market portfolio is known and used in the tests.
B) all individual assets are included in the market proxy.
C) the market proxy and the true market portfolio are highly negatively correlated.
D) the exact composition of the true market portfolio is known and used in the tests, and all individual assets are included in the market proxy.
E) all individual assets are included in the market proxy and the market proxy, and the true market portfolio are highly negatively correlated.
Correct Answer:
Verified
Correct Answer:
Verified
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