When Working with the CAPM, Which of the Following Factors

question 44

Multiple Choice

When working with the CAPM, which of the following factors can be determined with the most precision?

• A) The beta coefficient, b_i, of a relatively safe stock.
• B) The most appropriate risk-free rate, r_RF.
• C) The expected rate of return on the market, r_M.
• D) The beta coefficient of "the market," which is the same as the beta of an average stock.
• E) The market risk premium (RP_M).

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