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    Business
  3. Study Set
    Corporate Financial Management
  4. Exam
    Exam 8: The Capital Asset Pricing Model and Multi-Factor Models
  5. Question
    In the Formula E(ri) = Rf + Fi E(rm -
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In the Formula E(ri) = Rf + Fi E(rm -

Question 2

Question 2

Multiple Choice

In the formula E(ri) = rf + fi E(rm - rf) , what does the term E(rm - rf) represent?


A) The change in share value
B) The average risk premium for shares
C) The risk free rate
D) The increase in share value

Correct Answer:

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