In the 1972 empirical study by Black, Jensen, and Scholes, they found that the estimated slope of the security market line was _______ what the CAPM would predict.
A) higher than
B) equal to
C) less than
D) twice as much as
E) More information is required to answer this question.

Question

Quizplus · Accepted Answer

The 1972 empirical study by Black, Jensen, and Scholes found that the estimated slope of the security market line was less than what the Capital Asset Pricing Model (CAPM) would predict. This suggested that the actual returns on securities were not fully explained by the CAPM, indicating potential inefficiencies or other factors at play in the market.

In the 1972 Empirical Study by Black, Jensen, and Scholes