According to the capital asset pricing model (CAPM), the rate of return that investors require from a risky asset is equal to the risk-free rate, +:

(a) A risk premium based on the systematic risk (or market risk) of the security.

(b) A risk premium based on the unsystematic risk (also known as idiosyncratic or firm-specific risk) of the security.

(c) The securitys beta multiplied by the expected return on the market (E(Rm)).

(d) A risk premium based on the total risk (also known as sigma risk or volatility) of the security.