The Capital Asset Pricing Model (CAPM)says that the excess return on a stock is equal to its beta times the market risk premium.

Question

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The CAPM states that the expected excess return of a security over the risk-free rate is proportional to its beta (systematic risk) and the market risk premium (the difference between the expected return on the market and the risk-free rate). Therefore, the excess return on a stock is equal to its beta times the market risk premium.

The Capital Asset Pricing Model (CAPM)says That the Excess Return