General Studies · Capital Asset Pricing Model
What is the correct formula for the Capital Asset Pricing Model (CAPM) to calculate the expected return of an asset (K j )?
- 1K j = R f + b(R f - R m )
- 2K j = R f + b(R m - R f )✓
- 3K = R + b(R - M)
- 4K = R + b(R - R)
Correct answer
K j = R f + b(R m - R f )
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