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Investors need to know how much risk they have to take to confidently expect a certain percentage return. Likewise, managers want to know what return
Investors need to know how much risk they have to take to confidently expect a certain percentage return. Likewise, managers want to know what return shareholders require so that they can decide how to meet those expectations.
- Discuss the three topics below and how they each influence financial decisions regarding risk and return:
- The capital asset pricing model (CAPM)
- The constantgrowth model
- Risk premiums
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