According to the Capital Asset Pricing Model, Which of the Following

question 44

Multiple Choice

According to the capital asset pricing model, which of the following shares should have the highest required rate of return?

• A) Beta Electronics because its standard deviation is highest.
• B) Alpha Automobiles because its beta coefficient is highest.
• C) Omega foods because the ration of standard deviation/beta is the lowest.
• D) Not enough information is given to answer this question.

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