Both the CAPM and APT Suggest That an Asset Should

question 38

Multiple Choice

Both the CAPM and APT suggest that an asset should be priced so that it has a higher expected return

• A)when it has a greater systematic risk.
• B)when it has a greater risk in isolation.
• C)when it has a lower systematic risk.
• D)when it has a lower systematic risk and a lower risk in isolation.

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Definitions:

Middle-aged Adults

Refers to individuals typically between the ages of 40 to 65, often characterized by physical, psychological, and social changes.

Young Adults

Individuals in the stage of life following adolescence, typically aged from late teens to early thirties, often experiencing transitions in education, employment, and relationships.

Happiness

A state of well-being and contentment marked by feelings of joy, satisfaction, and fulfillment.

Half Century

A period of fifty years.