[简答题] Capital asset pricing model (CAPM)

[单项选择]If the Capital Asset Pricing Model (CAPM) applies and transactions costs are permitted, all else equal, the most likely result is that the security market line (SML) will:（）
A. plot on a flatter line.
B. plot on a steeper line.
C. no longer plot on a single line.

[单项选择]According to capital asset pricing model( CAPM), if an investor holds a portfolio that lies on the capital market line(CML) to the right of the market portfolio, that investor should expect that his portfolio will:（）
A. earn less return than on the market portfolio.
B. earn more return than on the market portfolio.
C. have less systematic risk than the market portfolio.

[单项选择]A basic assumption of the capital asset pricing model (CAPM) is that there are no transaction costs. If this assumption is relaxed, which of the following would be the least likely to occur（）
A. Diversification benefits will be realized up to the point that they offset transactions costs.
B. Each investor can have a unique view of a security market line.
C. Investors will not correct all mispricing.

[单项选择]The cost of equity using the capital asset pricing model (CAPM) approach and the discounted cash flow approach is: CAPM Discounted Cash Flow（）①A. 16.0% 16.0% ②B. 16.0% 15.4% ③C. 16.6% 15.4%
A. ①
B. ②
C. ③

[多项选择]Ernest intends to sell a capital asset on 1 February 2013 and wishes to maximise his after tax sales proceeds He is
also seeking advice on his inheritance tax position and on his will.
The following information has been obtained from a telephone conversation with Ernest and from client files.
Ernest:
- Is 54 years old and unmarried.
- Lives with Georgina, who is 48 years old, and her adult daughter, Eileen.
- Earns a salary of ￡130,000 per year.
- Has as yet made no disposals of capital assets in the tax year 2012/13.
- Intends to sell either an oil painting or 7,700 shares in Neutron Ltd on 1 February 2013
Oil painting:
- Ernest inherited the painting on the death of his uncle on 1 May 2007 when it was worth ￡23,300.
- Ernest’s uncle purchased the painting on 1 July 1993 for ￡19,500.
- The painting is expected to be worth ￡47,000 on 1 February 2013.
Shares in Neutron Ltd:
A. 400,000
B. 60,000
C. Investmentproperty
D. 380,000
E. -
F. Sharesin Neutron Ltd
G. 127,875
H. -
I. (a) Prepare calculations of the after tax sales proceeds that would be realised on the proposed sale of the
J. painting and on the proposed sale of the shares on 1 February 2013.
K. Note: you should assume that Ernest will make any necessary beneficial claims or elections.
L. (b) Prepare brief notes explaining the inheritance tax liabilities that will arise on the deaths of Ernest and
M. Georgina if no action is taken to reduce such liabilities; identify any actions that could be taken in order to
N. reduce these liabilities and explain the inheritance tax and capital gains tax implications of these actions.
O. Note: you are not required to prepare calculations for part (b) of this question. Assume that the tax rules and rates for 2011/12 continue to apply in subsequent years.