The Capital Asset Pricing Model (CAPM)assumes Which of the Following

question 16

Multiple Choice

The capital asset pricing model (CAPM) assumes which of the following?
I.a risk-free asset has no systematic risk.
II.beta is a reliable estimate of total risk.
III.the reward-to-risk ratio is constant.
IV.the market rate of return can be approximated.

• A)I and III only
• B)II and IV only
• C)I, III, and IV only
• D)II, III, and IV only
• E)I, II, III, and IV

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Definitions:

Wavelength

A measure of the distance from the peak of a light wave to the peak of the next.

Truly Red

Truly Red refers to the perception or the depiction of a pure, deep red color without any mixture, often used in context with specificity in color identification.

Visible Spectrum

The portion of the electromagnetic spectrum that is visible to the human eye, typically encompassing wavelengths from about 380nm to 750nm.

Saturation

The degree to which a color is pure, intense, or vivid; in psychology, it can also refer to the maximum degree of a feeling or quality.