The Basic Tenet of the CAPM Is That a Stock's

question 58

Multiple Choice

The basic tenet of the CAPM is that a stock's expected risk premium should be:

• A) greater than the expected market return.
• B) proportionate to the market return.
• C) proportionate to the stock's beta.
• D) greater than the risk-free rate of return.

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Definitions:

Strength-Is-Weakness Dynamic

A negotiation concept where a party's apparent strengths can be leveraged as weaknesses or vulnerabilities under certain conditions.

Permanent

Characterizing something that lasts indefinitely without change, intended to exist or be used for an indefinite duration.

Public

The general population or community at large, often considered as the audience or stakeholders in a particular context.

Mutually Perceived Membership

Mutually perceived membership describes a scenario in negotiations where all parties recognize and accept each other as legitimate participants.