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The Capital Asset Pricing Model, CAPM, refers to: Select one: a. the equilibrium model that determines a security's expected (required) rate of return based on

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The Capital Asset Pricing Model, CAPM, refers to: Select one: a. the equilibrium model that determines a security's expected (required) rate of return based on its relevant measure of risk b. the equilibrium model used to determine the beta coefficient for a firm's common stock c. the non-equilibrium model the Federal Reserve uses to determine the Federal funds rate which can serve as a proxy for the risk-free rate of return d. the equilibrium model used to determine the optimal level of diversification for a portfolio of at least 30 stocks When investing in risky securities such as common stocks, investors require a higher rate of return (a risk premium) for bearing which type of risk? of Select one a. Systematic (market) risk b. Unsystematic (diversifiable) risk c. Stand-alone risk d. Total risk (market and diversifiable risk)

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