According to the CAPM, the Required Rate of Return on a Stock

question 52

Multiple Choice

According to the CAPM, the required rate of return on a stock is a positive function of all of the following except:

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

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Definitions:

Adjusted R-Square

A statistical measure that adjusts the R-square value for the number of predictors in the model, providing a more accurate representation of the data's explanatory power.

Real Estate

The market sector involving the buying, selling, and leasing of land, buildings, and property.

House Size

The measurement of a living space in a home, often quantified in square feet or meters, indicating the available living area.

Residual

The discrepancy between actual observations and the values forecasted by a theoretical model.