According to the Capital Asset Pricing Model (CAPM), a well diversified portfolio's rate of return is a function Of
A) beta risk.
B) unsystematic risk.
C) unique risk.
D) reinvestment risk.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

With a diversified portfolio, the only risk remaining is market, beta, or systematic, risk. This is the only risk thatinfluences return according to the CAPM.

According to the Capital Asset Pricing Model (CAPM), a Well