The ____ Is Not a Factor Used in the Capital

question 85

Multiple Choice

The ____ is not a factor used in the capital asset pricing model (CAPM) to derive the return of an asset.

• A) prevailing risk-free rate
• B) dividend growth rate
• C) market return
• D) covariance between the asset's returns and market returns
• E) All of the above are factors used in the CAPM.

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Definitions:

Quantity Demanded

The amount of a product consumers are willing and able to purchase at a given price over a specified time period.

Income

The money received by an individual or business for work done, from investments, or from the sale of goods or services.

Cross-Price Elasticity

An index indicating the variation in demand for a particular item as a result of the price alteration of a different item.

Complements

Goods or services that are used together, such that the increase in demand for one results in an increase in demand for the other.