The CAPM model assumes that investors in assets expect to be compensated for two factors.Identify them.
A)Systematic risk and nondiversifiable risk
B)Idiosyncratic risk and time value of money
C)Time value of money and nondiversifiable risk
D)Time value of money and net present value
E)Depreciation and net present value

Question

Quizplus · Accepted Answer

The CAPM model assumes investors are compensated for the time value of money (risk-free rate) and nondiversifiable risk (systematic risk).

The CAPM Model Assumes That Investors in Assets Expect to Be