IVU ra Next Page Page 1 of 34 Question 1 (2.5 points) According to the Capital Asset Pricing Model (i.e., CAPM), if Rf = risk free interest rate, Rm = Expected return on the market portfolio, b = beta, and E(Ra) = expected return on stock a: OE(Ra) = Rf + (Rm - RF) OE(Ra) = Rf - b(Rm - Rf) OE(Ra) - bRf + (Rm - RF) E(Ra) - Rf + b(Rm - Rf) None of the above is a correct specification of the CAPM