American_Bankers_Association
CTFA · Question #83
According to the capital-asset pricing model (CAPM), a security's expected (required) return is equal to the risk-free rate plus a premium:
The correct answer is D. Based on the systematic risk of the security. See the full explanation below for the reasoning.
Investment Management
Question
According to the capital-asset pricing model (CAPM), a security's expected (required) return is equal to the risk-free rate plus a premium:
Options
- AEqual to the security's beta
- BBased on the unsystematic risk of the security
- CBased on the total risk of the security
- DBased on the systematic risk of the security
How the community answered
(39 responses)- A5% (2)
- B13% (5)
- C3% (1)
- D79% (31)
Topics
#CAPM#systematic risk#expected return#risk premium
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