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:

Net Utility

The overall value or satisfaction gained from consuming a product or service, after subtracting the costs associated with its consumption.

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Management

The process of dealing with or controlling things or people, often within an organizational setting, including planning, decision making, and coordinating resources.

Assumptions

Ideas or beliefs taken as true without proof.