The Capital Asset Pricing Model Is Given by R -

question 129

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 explanatory variable in this model is _________.

• A) R
• B) R - R_f
• C) R_M
• D) R_M - R_f

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