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.

---

Definitions:

Receiving Report

A document prepared by the receiving department to evidence the receipt of material or supplies that had been ordered.

Voucher

A document that authorizes a payment and records details about the transaction but does not represent cash itself.

Dividend Journal

A financial record that tracks dividends declared and paid by a company to its shareholders.

Receiving Report

A document that records the details of goods received from a supplier, verifying the quantities and condition of the goods.