The CAPM Allows Us to Identify the Efficient Portfolio of Risky

question 55

Multiple Choice

the CAPM allows us to identify the efficient portfolio of risky assets without having any knowledge of the ________ of each security.

• A) systematic risk
• B) common risk
• C) diversifiable risk
• D) expected return

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Definitions:

Estate

An interest in land. Property owned by a decedent at the time of his death.

Fee Simple Absolute

The highest form of land ownership, which gives the owner the right to possess and use the land for an unlimited period of time, subject only to governmental or private restrictions, and unconditional power to dispose of the property during his lifetime or upon his death.

Possess

To have ownership or control over an object or property.

Tenant In Common

A form of co-ownership where each party owns a specific fraction of property, but there is no division of the property itself. Each tenant's share can be passed on to heirs.