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The Capital Asset Pricing Model Is Given by R -

Question 129

Multiple Choice

The capital asset pricing model is given by R - RF = α + β(RM - Rf) + ε,where RM = expected return on the market,Rf = risk-free market return,and R = expected return on a stock or portfolio of interest.The explanatory variable in this model is _________.


A) R
B) R - Rf
C) RM
D) RM - Rf

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