As per the Capital Asset Pricing Model (CAPM), the required rate of return on a security is calculated as:

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Economics · Financial Management

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Risk-free rate of return (e.g., Treasury Bonds) + (Beta × Market Risk Premium)

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Answer 1

Return on Corporate Securities + Systematic Risk Premium

Answer 2

Return on Government Securities + Unsystematic Risk Premium

Answer 3

Return on individual securities + Beta Premium

Answer 4

Risk-free rate of return (e.g., Treasury Bonds) + (Beta × Market Risk Premium)

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