According to the Capital Asset Pricing Model (CAPM), Which One

question 58

Multiple Choice

According to the Capital Asset Pricing Model (CAPM) , which one of the following statements is false?

• A)The expected rate of return on a security increases in direct proportion to a decrease in the risk-free rate.
• B)The expected rate of return on a security increases as its beta increases.
• C)A fairly priced security has an alpha of zero.
• D)In equilibrium, all securities lie on the security market line.