Based on CAPM, the Expected Return on a Stock Is

question 98

Multiple Choice

Based on CAPM, the expected return on a stock is affected by the

• A) Stock's beta
• B) Market return
• C) Risk-free rate
• D) All of the above
• E) None of the above

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Definitions:

Stabilization Policies

Government strategies aimed at maintaining economic stability by reducing inflation and unemployment.

Political Business Cycle

The concept that elected officials may induce expansions of the economy before elections to improve their chances of re-election.

Central Bank

The primary monetary authority of a country, which manages the nation's currency, money supply, and interest rates.

Deficits

Financial shortfalls that occur when an organization's, typically a government's, expenditures surpass its revenues within a specific time frame.