Which of the Following Gives the Best Definition of the CAPM

question 9

Multiple Choice

Which of the following gives the best definition of the CAPM approach?

• A) Unsystematic risk, as measured by beta, is the only factor affecting the level of return required on a share for a completely diversified investor.
• B) Systematic risk, as measured by beta, is the only factor affecting the level of return required on a share for a completely diversified investor.
• C) Unsystematic risk, as measured by beta, is one of the key factors affecting the level of return required on a share for a completely diversified investor.
• D) Systematic risk, as measured by beta, is one of the key factors affecting the level of return required on a share for a completely diversified investor.

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Definitions:

Purchasing Volume

The quantity of goods or services bought, often considered in terms of the discounts or benefits it can secure.

Upscale Retailer

A retail store that sells high-end or luxury products to affluent customers.

Economic Influence

The impact of economic factors, such as inflation, unemployment, and economic policies, on consumer behavior and business operations.

Channel Captain

A leading entity within a distribution channel that exercises authority and power, often responsible for the coordination and direction of other channel members.