CAPM Says: (Nominate the Incorrect Statement)

question 14

Multiple Choice

CAPM says: (nominate the incorrect statement) :

• A) the expected return on a share is equal to the risk-free rate plus the amount of beta multiplied by the risk premium.
• B) if investors wish to buy a particular share, the expected return must, at least, be equal to the return they would earn if they invested in a risk-free asset.
• C) investors need to be compensated for taking risk, they will not be compensated for total risk, just the unsystematic risk.
• D) beta and the risk premium multiplied together, plus the risk-free rate, provide the expected return of the share.

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Definitions:

Stomach Acids

Refers to the digestive fluids secreted by the stomach lining, crucial for breaking down food and killing harmful bacteria.

Transdermally

Through the skin; a method of administering medications or substances across the skin's surface to enter the bloodstream.

Sublingually

Administering medication by placing it under the tongue, allowing for rapid absorption into the bloodstream.

Antidote

A substance that can counteract a form of poisoning, often by neutralizing the poison or preventing its absorption.