According to the Capital Asset Pricing Model (CAPM), a well diversified portfolio's rate of return is a function of
A)market risk.
B)unsystematic risk.
C)unique risk.
D)reinvestment risk.

Question

Quizplus · Accepted Answer

According to the Capital Asset Pricing Model (CAPM), a well diversified portfolio's rate of return is primarily determined by the market risk, which is also known as systematic risk. Unsystematic risk, unique risk, and reinvestment risk are not considered in the CAPM.

According to the Capital Asset Pricing Model (CAPM), a Well