Which of the following statements is most correct? (Points : 6) A. Tests have sh

Question

Which of the following statements is most correct? (Points : 6)
A. Tests have shown that the betas of individual stocks are unstable over time, but that the betas of large portfolios are reasonably stable over time.
B. Richard Roll has argued that it is not even possible to test the CAPM to see if it is correct.
C. Tests have shown that the risk/return relationship appears to be linear, but the slope of the relationship is less than that predicted by the CAPM.
D. Statements A and B are correct.
E. Statements A, B, and C are correct.

Explanation / Answer

D. Statements A and B are correct

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