The ____ is often used to estimate the required rate of return for any firm with public traded stock.
A) capital asset pricing model
B) Treynor index
C) Sharpe index
D) B and C

Question

Quizplus · Accepted Answer

The capital asset pricing model (CAPM) is commonly used to estimate the required rate of return for any firm with publicly traded stock. It takes into account the risk-free rate of return, the expected market return, and the firm's beta (a measure of the stock's volatility compared to the market). The Treynor and Sharpe indexes are also used in finance, but they are more focused on measuring risk-adjusted performance of a portfolio or investment.

The ____ Is Often Used to Estimate the Required Rate