Under the CAPM, the Required Rate of Return on a Firm's

question 123

True/False

Under the CAPM, the required rate of return on a firm's common stock is determined only by the firm's market risk.If its market risk is known, and if that risk is expected to remain constant, then analysts have all the information they need to calculate the firm's required rate of return.

---

Definitions:

Rawls Theory

A concept of justice as fairness, proposing principles of justice to structure society, formulated by philosopher John Rawls.

Equal Liberty

The principle that all individuals should have the same freedom and rights under the law.

Social Advantages

Benefits or privileges that certain individuals or groups have due to their status, position, or wealth in society, which can lead to inequality.

Economic Advantages

Benefits that contribute to a stronger financial position, such as increased income, market dominance, or efficient resource utilization.