Based on the Capital Asset Pricing Model,which One of the Following

question 50

Multiple Choice

Based on the capital asset pricing model,which one of the following must increase the expected return on an individual security,all else constant?

• A)An increase in the risk level of that security as measured by the standard deviation
• B)An increase in the risk-free rate given a security beta of 1.42
• C)A decrease in the market rate of return given a security beta of 1.13
• D)A decrease in the market rate of return given a security beta of .78
• E)A decrease in the risk-free rate given a security beta of 1.06

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