According to the CAPM,the Expected Return on a Risky Asset

question 1

Essay

According to the CAPM,the expected return on a risky asset depends on three components.Describe each component,and explain its role in determining expected return.

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Definitions:

Uracil

A nitrogenous base found in RNA, replacing thymine found in DNA, and pairs with adenine during RNA synthesis.

Adenine

A purine nucleobase, one of the four building blocks of DNA and RNA, involved in cellular energy transfer and signaling.

Ribose

Ribose is a five-carbon sugar essential for the structure of RNA and plays a role in the synthesis of ATP, an energy-carrying molecule in cells.

DNA

Deoxyribonucleic acid, a molecule that contains the instructions an organism needs to develop, live, and reproduce, made up of two long strands forming a double helix.