Question: The capital asset pricing model illustrates how risk is incorporated into user decision models. Required: Discuss the capital asset pricing model, including systematic and unsystematic

The capital asset pricing model illustrates how risk is incorporated into user decision models.

Required:
Discuss the capital asset pricing model, including systematic and unsystematic risk, b, the relationship between risk and return, how to avoid risk, and the relation-ship of b to stock prices.

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Investors wish to use accounting information to minimize risk and to maximize returns The capital asset pricing model CAPM is an attempt to deal with both risks and return The rate of return to an inv... View full answer

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