Question
Which of the following gives the capital asset pricing model (CAPM) equation in words? Multiple Choice The expected rate of return on a stock is
Which of the following gives the capital asset pricing model (CAPM) equation in words? Multiple Choice
The expected rate of return on a stock is equal to the market risk premium plus the stocks beta coefficient times the risk free rate.
The market risk premium is equal to the expected rate of return on a stock plus the specific stocks beta coefficient times the risk-free rate.
The specific stocks beta coefficient is equal to the risk-free rate plus the expected rate of return on a stock times the market risk premium.
The capital asset pricing model is not an equation; it is a guideline for capital investment.
The expected rate of return on a stock is equal to the risk-free rate plus the specific stocks beta coefficient times the market risk premium.
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Horngrens Accounting Volume 1
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol Meissner, JoAnn Johnston, Peter Norwood
11th Canadian Edition
0135359708, 9780135359709
