Which of the following statements is true about models that attempt to measure the empirical performance of the CAPM?
A)The conventional CAPM works better than the conditional CAPM with human capital.
B)The conventional CAPM works about the same as the conditional CAPM with human capital.
C)The conditional CAPM with human capital yields a better fit for empirical returns than the conventional CAPM.
D)Adding firm size to the model specification dramatically improves the fit.

Question

Quizplus · Accepted Answer

Studies have shown that the conditional CAPM with human capital yields a better fit for empirical returns than the conventional CAPM. Adding firm size to the model specification may slightly improve the fit, but not dramatically.

Which of the Following Statements Is True About Models That