The Capital Asset Pricing Model Asserts That the ________ Return

question 47

Multiple Choice

The Capital Asset Pricing Model asserts that the ________ return is equal to the risk-free rate plus a risk premium for systematic risk.

• A)expected
• B)holding period
• C)realised
• D)ex-post

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Definitions:

Average Tax Rate

The proportion of total income that is paid as tax.

Income Tax

A tax levied by a government directly on income, especially an annual tax on personal income.

Horizontal Equity

The principle that individuals in similar financial conditions should be treated equally by the taxation system.

Vertical Equity

A principle in taxation that states taxpayers with a greater ability to pay should contribute more in taxes.