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

Question

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This statement accurately describes the formula used in the Capital Asset Pricing Model (CAPM). The excess return on an investment is calculated by taking the expected return of the asset and subtracting the risk-free rate. The beta of the asset measures its volatility in relation to the overall market. The market risk premium refers to the additional return that investors expect to earn by taking on the risk of investing in the stock market. Therefore, the formula for the CAPM is: Excess Return = Risk-Free Rate + Beta x (Market Risk Premium).

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