In the Context of the Capital Asset Pricing Model (CAPM)

question 65

Multiple Choice

In the context of the Capital Asset Pricing Model (CAPM) , the relevant risk is

• A) unique risk.
• B) market risk.
• C) standard deviation of returns.
• D) variance of returns.

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Definitions:

Negotiability

The characteristic of a financial instrument that allows it to be transferred or assigned from one party to another, facilitating commerce and trade.

Electronic Deposit

The transfer of funds directly into a bank account, eliminating the need for physical checks.

Certificate of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate that is issued by a bank.

Principal

A primary party to a transaction, such as the chief participant in a business or the main amount of a loan.