Similarities and differences between the cml and sml as


1. What are the similarities and differences between the CML and SML as models of the risk-return trade-off?
2. While the capital asset pricing model (CAPM) has been widely used to analyze securities and manage portfolios for the past 50 years, it has also been widely criticized as providing too simple a view of risk. Describe three problems in relation to the definition and estima- tion of the beta measure in the CAPM that would support this criticism.

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Microeconomics: Similarities and differences between the cml and sml as
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