Does the market adjust for risk? How? Is the adjustment timely enough?
Some people say the P/E ratio may not be a reliable indicator of a stock’s expected future performance. Why is that?
Is the stock valuation model a useful tool? Why or why not?
What is the Capital Asset Pricing Model? How can it be used to calculate a businesses required return? Is it useful or too theoretical?
Note: Do not cut and past your reply from the internet or the text or you will not receive credit. I am interested in your own opinion.