Within the Capital Asset Pricing Model

question 109

Multiple Choice

Within the capital asset pricing model:

• A) the risk-free rate is usually higher than the return in the market.
• B) the higher the beta the lower the required rate of return.
• C) beta measures the volatility of an individual stock relative to a stock market index.
• D) beta is added to the market risk free rate.

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Definitions:

Filters

Mechanisms or criteria used to screen, select, or refine information or choices.

Exonerating Circumstances

Situations or conditions that relieve someone from any blame or guilt in a given scenario.

Negotiators

Individuals or parties engaged in discussions aimed at reaching an agreement or resolving a conflict.

Positions

The locations or arrangements in which something is situated, or the stance taken by a person in an argument.