The CAPM Is a Theory of the Relationship Between Risk

question 99

True/False

The CAPM is a theory of the relationship between risk and return that states that the expected risk premium on any security equals its beta times the market return.

---

Definitions:

Lineup Identification

A process in law enforcement where witnesses or victims are asked to identify a perpetrator from a group of individuals.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation, often testable through experimentation or other forms of research.

Independent Variable

In an experiment, the variable that the experimenter manipulates to examine its impact on the dependent variable.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.