According to the Capital Asset Pricing Model (CAPM), Which One

question 44

Multiple Choice

According to the Capital Asset Pricing Model (CAPM) , which one of the following statements is NOT true?

• A)The expected rate of return of a security decreases proportionally with a decrease in the risk-free rate.
• B)The expected rate of return of a security increases as its beta increases.
• C)A fairly priced security has an alpha of zero.
• D)In equilibrium, all securities lie on the security market line.

---

Definitions:

Boredom

A state of feeling disinterested and unengaged, often due to a lack of stimulation or excitement.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

Teleprompter Speed

The rate at which text scrolls on a teleprompter, critical for allowing speakers or broadcasters to deliver scripted messages comfortably and naturally.

Recurring Depression

A mental health disorder characterized by repeated episodes of depression, where individuals experience persistent sadness, loss of interest in activities, and other depressive symptoms.