CAPM says: (nominate the incorrect statement) :
A) the expected return on a share is equal to the risk-free rate plus the amount of beta multiplied by the risk premium.
B) if investors wish to buy a particular share, the expected return must, at least, be equal to the return they would earn if they invested in a risk-free asset.
C) investors need to be compensated for taking risk, they will not be compensated for total risk, just the unsystematic risk.
D) beta and the risk premium multiplied together, plus the risk-free rate, provide the expected return of the share.
Correct Answer:
Verified
Q9: The effect of a change in the
Q10: Contributing ordinary shares:
A) may be cumulative, participating
Q11: Using sustainable growth rates:
A) seeks to overcome
Q12: Characteristics of preference shares include:
A) cumulative shareholders
Q13: Investing in precious metals:
A) is often undertaken
Q15: In terms of the asset classes of
Q16: The relationship between nominal rates and real
Q17: Technical analysts:
A) use forecasts of future data
Q18: The Gordon dividend discount model has a
Q19: Market forces are the primary determinant of
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