According to the Capital Asset Pricing Model (CAPM), Which of the Following

question 80

Multiple Choice

According to the capital asset pricing model (CAPM) , which of the following is NOT relevant to the required return for a firm's equity?

• A)The standard deviation of returns for the firm's equity.
• B)The risk-free rate.
• C)The market return on a diversified equity portfolio.
• D)The beta of the share.
• E)All of these are relevant.

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Definitions:

Hair Dryers

Electrical devices used to blow dry hair by emitting warm air.

Economies of Scope

Cost advantages that arise from a firm or company expanding its product line or markets, exploiting shared resources or technologies.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the cost per unit as output increases.

Outputs

The goods or services produced by a business or an economy.