The Zero-Beta Form of the CAPM Uses a Zero-Beta Portfolio

question 39

True/False

The zero-beta form of the CAPM uses a zero-beta portfolio in place of the return on the market portfolio.

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Definitions:

Average Variable Cost

The total variable costs (like labor and materials) divided by the quantity of output produced, indicating the variable cost per unit.

Variable Cost

Costs that change in proportion to the activity of a business, such as materials and labor costs.

Total Cost

The complete cost of production that includes both fixed and variable costs.

Fixed Cost

Expenses that do not change in the short term, irrespective of the level of production or sales volume.