According to the CAPM, the required rate of a return on a stock can be estimated using only beta and the risk-free rate.

Question

Quizplus · Accepted Answer

According to the Capital Asset Pricing Model (CAPM), the required rate of return on a stock is estimated using the stock's beta, the risk-free rate, and the market risk premium (the difference between the expected return on the market portfolio and the risk-free rate).

According to the CAPM, the Required Rate of a Return