Based on the Capital Asset Pricing Model, Which One of the Following

question 61

Multiple Choice

Based on the capital asset pricing model, which one of the following must increase the expected return on an individual security, all else held constant?

• A)An increase in the risk level of that security as measured by standard deviation
• B)An increase in the risk-free rate given a security beta of 1.42
• C)A decrease in the market rate of return given a security beta of 1.13
• D)A decrease in the market rate of return given a security beta of .78
• E)A decrease in the risk-free rate given a security beta of 1.06

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Definitions:

Vitamin B12

An essential vitamin necessary for the normal functioning of the brain and nervous system, and for the formation of blood.

Pernicious Anemia

An autoimmune disorder that prevents the body from absorbing vitamin B12, leading to a severe type of anemia.

Vitamin A

An essential fat-soluble vitamin important for vision, immune function, and skin health, occurring naturally in foods like carrots, spinach, and liver.

Night Blindness

A condition characterized by difficulty seeing in low light or darkness, often due to vitamin A deficiency.