The Capital Asset Pricing Model Suggests That the Required Return

question 25

Multiple Choice

The capital asset pricing model suggests that the required return on a firm's stock is a positive function of:​

• A)the risk-free rate of interest.
• B)the market rate of return.
• C)the stock's beta.
• D)all of the above

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Definitions:

Experiential System

A cognitive processing system that operates based on experiences, emotions, and intuitions rather than analytical reasoning.

Cognitive System

A cognitive system refers to the mental processes and structures involved in perception, thinking, reasoning, and understanding.

Implicit Attitude

Unconscious or automatic attitudes or feelings towards objects, people, or situations, which influence responses and behaviors.

Explicit Attitude

Attitudes that are consciously acknowledged and expressed by individuals, often through verbal statements or overt actions.