The Capital Asset Pricing Model (CAPM)says That the Excess Return

question 90

True/False

The Capital Asset Pricing Model (CAPM)says that the excess return on an investment is equal to its beta times the market risk premium.

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Definitions:

Profitability

A financial metric indicating the extent to which a person or business generates more revenue than the costs incurred in producing its goods or services.

Interest Rate

The percentage of an amount of money charged for its use per period of time, often annually.

Present Value

The present-day value of a future amount of money or series of cash flows, based on a given rate of return.

Interest Rate

Lenders impose a charge, as a percentage of the principal, on borrowers for the use of their assets.