According to the CAPM, the expected return of an asset that has just diversifiable risk and no systemic risk should be: (A) equal to zero. B equal to the expected return of the market portfolio. undetermined. D between the risk-free rate and the expected return of the market portfolio. E equal to the risk-free rate of return.
According to the CAPM, the expected return of an asset that has just diversifiable risk and no systemic risk should be: (A) equal to zero. B equal to the expected return of the market portfolio. undetermined. D between the risk-free rate and the expected return of the market portfolio. E equal to the risk-free rate of return.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 10MC
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![According to the CAPM, the expected return of an asset that has just diversifiable risk and no systemic risk should be:
A equal to zero.
B equal to the expected return of the market portfolio.
undetermined.
D between the risk-free rate and the expected return of the market portfolio.
E equal to the risk-free rate of return.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe3cc1ad9-3862-4a0c-b3b9-8eb214518209%2F66f9d1b4-7a15-4951-932e-ce140dadf781%2Fg2c4h1l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:According to the CAPM, the expected return of an asset that has just diversifiable risk and no systemic risk should be:
A equal to zero.
B equal to the expected return of the market portfolio.
undetermined.
D between the risk-free rate and the expected return of the market portfolio.
E equal to the risk-free rate of return.
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