An analyst who looks at real estate decides to apply the


An analyst who looks at real estate decides to apply the capital asset pricing model to estimate the risk (beta) for real estate. He regresses returns on a real estate index (based on appraised values) against returns on a stock index, and estimates a beta of 0.20 for real estate. Would you agree with this estimate? If you do not, what might be the sources of your disagreement?

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Financial Management: An analyst who looks at real estate decides to apply the
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