The _____ states that an investor needs to be compensated for the time value of capital (money)invested and the additional risk for making the investment.

Question

Quizplus · Accepted Answer

The Capital Asset Pricing Model (CAPM) is based on the concept that investors need to be compensated for both the time value of their money and the additional risk they take on by investing in a particular asset or security. CAPM is used as a tool for calculating the expected return of an asset or security, taking into account the risk-free rate, beta, and the expected return of the market.

The _____ States That an Investor Needs to Be Compensated