According to the CAPM,the Expected Return on a Risky Asset

question 1

Essay

According to the CAPM,the expected return on a risky asset depends on three components.Describe each component,and explain its role in determining expected return.

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Definitions:

Societal Norms

The shared expectations and rules that guide the behavior of people within social groups and communities.

Attribution Theory

The psychological theory that explains how people infer the causes of their own and others' behavior, attributing it to either internal dispositions or external situations.

F-ratio

A statistical measure used in ANOVA tests to compare the variance among group means to the variance within groups.

P-value

The P-value is a statistical measure that helps determine the significance of results, indicating the probability of observing the given results by chance.