The Expected Return-Beta Relationship

question 37

Multiple Choice

The expected return-beta relationship

• A) is the most familiar expression of the CAPM to practitioners.
• B) refers to the way in which the covariance between the returns on a stock and returns on the market measures the contribution of the stock to the variance of the market portfolio, which is beta.
• C) assumes that investors hold well-diversified portfolios.
• D) All of the options are true.
• E) None of the options are true.

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