If You Were to Consider the CAPM as a One-Factor

question 9

Multiple Choice

If you were to consider the CAPM as a one-factor model,then the factor would be the:

• A)rate of inflation.
• B)market risk premium.
• C)GNP.
• D)risk-free rate.
• E)individual beta of each security or portfolio.

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Definitions:

Chromosomes

Long, stringy formations found within the cell nucleus of both animals and plants, composed of proteins and a solitary DNA molecule, responsible for bearing genetic data.

Longevity

The length of an individual's life, often explored in the context of factors that contribute to a prolonged life span.

Selective Optimization

A strategy focusing on maximizing performance in some areas through the selection and optimization of resources, while minimizing losses in other areas.

Compensation

A concept that refers to making up for a deficiency in one area by excelling in another, or a payment made to someone for loss or suffering.