General Studies · Capital Asset Pricing Model
According to the Capital Asset Pricing Model (CAPM), the expected return of an asset equals the risk-free rate plus:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1alpha derived from the historical regression line
- 2the variance of the asset's historical returns
- 3standard deviation adjusted for correlation
- 4beta times the market risk premium✓
Correct answer
beta times the market risk premium
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