Both the CAPM and APT Suggest That an Asset Should

question 38

Multiple Choice

Both the CAPM and APT suggest that an asset should be priced so that it has a higher expected return

• A)when it has a greater systematic risk.
• B)when it has a greater risk in isolation.
• C)when it has a lower systematic risk.
• D)when it has a lower systematic risk and a lower risk in isolation.

---

Definitions:

Nutritional Intake

The total amount of food substances consumed that provide nutritional support for an organism.

Lifespan Perspective

The study of human development from birth to death, emphasizing growth and changes at every stage of life.

Human Development

The multidisciplinary study of how people grow and change physically, cognitively, and socially throughout their lifespan.

Cognitive Perspective

An approach in psychology that focuses on mental processes such as perception, memory, and problem-solving.