The CAPM ________.
A) predicts the relationship between risk and expected return of an asset
B) provides a benchmark rate of return for evaluating possible investments
C) helps us make an educated guess as to expected return on assets that have not yet traded in the marketplace
D) All of the options.

Question

Quizplus · Accepted Answer

The CAPM predicts the relationship between risk and expected return of an asset, provides a benchmark rate of return for evaluating possible investments, and helps us make an educated guess as to expected return on assets that have not yet traded in the marketplace. Therefore, option D is the correct choice.