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According to CAPM, risk-free rate, market risk premium and beta capture all of a stock's required rate of return. This is because the market risk

According to CAPM, risk-free rate, market risk premium and beta capture all of a stock's required rate of return. This is because the market risk only captures systematic risk of owning a stock. There is also the idiosyncratic risk that is not part of the CAPM (i.e., not in the beta equation).

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