Hello sir,
If a company has a low pe ratio, Capm is unable to forecast returns accurately.
Why does this sentence is correct?
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PE ratio
5y ago#1As it stands, the statement on its own is not strictly true (where have you found the statement - it depends somewhat on the context).
CAPM does not forecast returns. CAPM determines the rate of return demanded by shareholders, which is not the same as forecasting the returns.
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