Multiple Choice
According to the Capital Asset Pricing Model a stock's risk premium is:
A) a price premium on low risk stocks that investors are willing to pay for safety.
B) the risk premium on an average stock factored by a measure of the stock's market risk.
C) the risk premium on an average stock factored by a measure of the stock's total risk.
D) extra money paid for high risk stocks because they usually have high returns.
Correct Answer:
Verified
Correct Answer:
Verified
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