Use the Following Three Statements to Answer This Question

question 69

Multiple Choice

Use the following three statements to answer this question:
I.The CAPM points out that rational investors should be compensated for unique risk.
II.The CAPM implies that non-systematic risk is the appropriate measure of risk to determine the risk premium required by investors for holding a risky security.
III.The expected portfolio return from non-systematic risk is zero.

• A)I, II and III are correct.
• B)I and II are incorrect, III is correct.
• C)I, II are correct, III is incorrect.
• D)I, III are incorrect, II is correct.

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Definitions:

Athenian Model

Refers to the ancient Athenian democracy, characterized by direct participation of citizens in decision-making processes.

Portable Personal Identity

An individual's sense of self that is consistent and carried with them across different social contexts and interactions.

Geographically Fixed

Referring to entities, phenomena, or activities that are stationary and tied to a specific physical location.

Secularisation

The process by which religious institutions, practices, and beliefs lose their social significance.