The capital asset pricing model (CAPM)is an approach
A)to determine the price of equity capital.
B)used by marketers to determine the price of saleable product.
C)can be applied only to domestic markets.
D)none of the above

Question

Quizplus · Accepted Answer

The capital asset pricing model (CAPM) is primarily used to determine the expected return on an investment and to price equity capital by assessing the risk associated with the investment. Option B is incorrect because CAPM has nothing to do with pricing saleable products, and Option C is incorrect because CAPM can be applied to both domestic and international markets.

The Capital Asset Pricing Model (CAPM)is an Approach