A Stock's Required Rate of Return as Determined by the Capital

question 103

Multiple Choice

A stock's required rate of return as determined by the capital asset pricing model is influenced by

• A) the risk-free rate.
• B) the expected return on the market.
• C) the standard deviation of past returns.
• D) A and B, but not C.

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Definitions:

MRP Curve

The Marginal Revenue Product curve shows the additional revenue generated by employing one more unit of input or labor.

Wage Rate

The standard amount of pay given for work performed, typically expressed per hour, day, or piece.

Equilibrium

A balance between market demand and supply, resulting in steady prices.

Factor's Price

Refers to the price of inputs used in the production of goods or services, such as labor, raw materials, and capital.