Within the Capital Asset Pricing Model

question 8

Multiple Choice

Within the capital asset pricing model

• A)the risk-free rate is usually higher than the return in the market.
• B)the higher the beta, the lower the required rate of return.
• C)beta measures the volatility of an individual stock relative to a stock market index.
• D)Two of the options.

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Definitions:

Disaffirm

The legal act of rejecting or voiding a contract or agreement, especially used in contexts where one party is not legally competent to enter into a contract.

Contract

A contract is an official agreement among two or more individuals creating reciprocal legal duties that can be upheld in court.

Emancipated

The condition of being freed from legal, social, or political restrictions; commonly referring to a minor legally recognized as capable of acting as an adult.

Age of Majority

The legal age at which an individual is considered an adult and responsible for his or her own actions, varying by jurisdiction.