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:

Neutrons

Subatomic particles found in the nucleus of an atom, having no electrical charge and a mass slightly greater than that of a proton.

Element

A pure chemical substance consisting of one type of atom, distinguished by its atomic number, which is the number of protons in its nucleus.

Isotope

Atoms of the same element that have different numbers of neutrons in their nuclei, leading to different atomic masses but the same chemical behavior.

Neutrons

Tiny particles located within an atom's nucleus, possessing no electrical charge and having a mass that is marginally higher than protons.