The Capital Asset Pricing Model Is Given by R -

question 31

Multiple Choice

The capital asset pricing model is given by R - R_f = α + β(R_M - R_f) + ε, where R_M = expected return on the market, R_f = risk-free market return, and R = expected return on a stock or portfolio of interest. The response variable in this model is ________.

• A) R
• B) R - R_f
• <sub
• C) _RM
• D) _RM - R_f

---

Definitions:

Rapid

Characterized by great speed or quickness of movement or action.

Molten

Melted.

Melted

Refers to a solid substance that has been turned into a liquid by heating.

Friction

The resistance that one surface or object encounters when moving over another, often generating heat.