The CAPM computes expected rates of return on common equity capital using the following model:
E[R_Ej] = E[R_F] + b _j x {E[R_M] - E[R_F]}
What are the roles of each of the three components of this model?

Question

Quizplus · Accepted Answer

The Answer of The CAPM computes expected rates of return on common equity capital using the following model: E[R_Ej] = E[R_F] + b _j x {E[R_M] - E[R_F]} What are the roles of each of the three components of this model?

The CAPM Computes Expected Rates of Return on Common Equity