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Question 17.20: “In the CAPM, investors should be compensated for accepting ...

“In the CAPM, investors should be compensated for accepting systematic risk; for the APT model, investors are rewarded for accepting both systematic risk and unsystematic risk.” Do you agree with this statement?

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Disagree. As with the CAPM, investors are not compensated for risk that they could remove but choose not to.

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