General Studies · Financial Management
Which of the following represents the correct formula for the Capital Asset Pricing Model (CAPM) to calculate the expected return of an asset (K j )?
- 1K j = R f + β(R f - R m )
- 2K j = R f + β(R m - R f )✓
- 3K j = R f - β(R m - R f )
- 4K j = R f + β(R m + R f )
Correct answer
K j = R f + β(R m - R f )
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