The Capital Asset Pricing Model (CAPM)assumes Which of the Following

question 16

Multiple Choice

The capital asset pricing model (CAPM) assumes which of the following?
I.a risk-free asset has no systematic risk.
II.beta is a reliable estimate of total risk.
III.the reward-to-risk ratio is constant.
IV.the market rate of return can be approximated.

• A)I and III only
• B)II and IV only
• C)I, III, and IV only
• D)II, III, and IV only
• E)I, II, III, and IV

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