The ____ is not a factor used in the capital asset pricing model (CAPM) to derive the return of an asset.
A) prevailing risk-free rate
B) dividend growth rate
C) market return
D) covariance between the asset's returns and market returns
E) All of the above are factors used in the CAPM.

Question

Quizplus · Accepted Answer

The dividend growth rate is not a factor included in the CAPM formula, which includes the risk-free rate, market return, and covariance between the asset's returns and market returns.

The ____ Is Not a Factor Used in the Capital