The Expected Return-Beta Relationship

question 73

Multiple Choice

The expected return-beta relationship

• A)is the most familiar expression of the CAPM to practitioners.
• B)refers to the way in which the covariance between the returns on a stock and returns on the market measures the contribution of the stock to the variance of the market portfolio, which is beta.
• C)assumes that investors hold well-diversified portfolios.
• D)all of the above are true.
• E)none of the above are true.

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