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    Introduction to Corporate Finance Study Set 3
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    Exam 9: The Capital Asset Pricing Model Capm
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    "There May Be Some Truth in the CAPM, but My
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"There May Be Some Truth in the CAPM, but My

Question 36

Question 36

Essay

"There may be some truth in the CAPM, but my sister-in-law bought a stock last year that earned a 20% return, much higher than what was expected using the CAPM." Evaluate this criticism.

Correct Answer:

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The CAPM does not claim to des...

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