The most important role of the capital asset pricing model (CAPM) is to determine:
A) the beta for an individual security or portfolio.
B) the total risk of a security or portfolio.
C) the systematic risk of a security or a portfolio.
D) the required return on a security or portfolio.

Question

Quizplus · Accepted Answer

The Capital Asset Pricing Model (CAPM) is primarily used to determine the required return on a security or portfolio, taking into account its systematic risk relative to the overall market.

The Most Important Role of the Capital Asset Pricing Model