Multiple Choice
The capital asset pricing model (CAPM) states which of the following?
A) The expected risk premium on an investment is proportional to its beta.
B) The expected rate of return on an investment is proportional to its beta.
C) The expected rate of return on an investment is determined entirely by the risk-free rate and the market rate of return.
D) The expected rate of return on an investment is determined entirely by the risk-free rate.
Correct Answer:
Verified
Correct Answer:
Verified
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