According to the CAPM, the Required Rate of Return on a Stock

question 52

Multiple Choice

According to the CAPM, the required rate of return on a stock is a positive function of all of the following except:

• A) the risk-free rate of interest.
• B) the market rate of return.
• C) the stock's beta.
• D) the company's earnings.

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Definitions:

Accounts Payable

Money owed by a company to its creditors or suppliers for goods and services that have been received but not yet paid for.

Debit Entry

An accounting entry that increases an asset or expense account, or decreases a liability, equity, or revenue account.

Credit Entry

An accounting entry that increases a liability or equity account or decreases an asset or expense account.

Service Revenue

Income earned by a company for services provided to customers or clients.