The Capital Asset Pricing Model Suggests That the Required Return

question 18

Multiple Choice

The capital asset pricing model suggests that the required return on a firm's stock is a positive function of:

• A) the risk-free rate of interest.
• B) the market rate of return.
• C) the stock's beta.
• D) all of the above

---

Definitions:

Alternative

A different option or choice available in a situation, offering a variation from the usual.

Management Function

The roles and actions performed by managers to plan, organize, lead, and control an organization’s activities.

Setting Objectives

The process of identifying specific goals and targets that an individual or organization aims to achieve within a specified timeframe.

Planning

The process of setting objectives, outlining tasks, and allocating resources to achieve goals.