On what proposition is the concept of global CAPM with partially segmented capital markets based?
A) The correlations of returns between emerging markets and developed markets are often near zero or even negative, so significant diversification potential exists with these securities. There are no other systematic risk factors in this case that need to be priced.
B) The correlations of returns between emerging markets and developed markets are often near zero or even negative, so significant diversification potential exists with these securities. However, even though no risk premium is attributed to correlations with developed markets, local factors generate systematic risk and must be priced.
C) The cost of capital in emerging market countries is equal to the risk-free rate from integrated markets plus an integrated risk premium component, and an additional segmented market component.
D) The cost of capital in emerging market countries is equal to the local government bond rate in the emerging market country as the risk-free rate plus an integrated market risk premium plus a segmented market risk premium.
E) None of the statements above is correct.

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The Answer of On what proposition is the concept of global CAPM with partially segmented capital markets based?
A) The correlations of returns between emerging markets and developed markets are often near zero or even negative, so significant diversification potential exists with these securities. There are no other systematic risk factors in this case that need to be priced.
B) The correlations of returns between emerging markets and developed markets are often near zero or even negative, so significant diversification potential exists with these securities. However, even though no risk premium is attributed to correlations with developed markets, local factors generate systematic risk and must be priced.
C) The cost of capital in emerging market countries is equal to the risk-free rate from integrated markets plus an integrated risk premium component, and an additional segmented market component.
D) The cost of capital in emerging market countries is equal to the local government bond rate in the emerging market country as the risk-free rate plus an integrated market risk premium plus a segmented market risk premium.
E) None of the statements above is correct.

On What Proposition Is the Concept of Global CAPM with Partially