All securities in an equivalent risk class are priced to offer the same expected return.

Name: All securities in an equivalent risk class are priced to offer the same expected return.
Brand: Quizplus
Rating: 4.7 (39 reviews)

Question

Quizplus · Accepted Answer

This statement is based on the concept of the Capital Asset Pricing Model (CAPM), which suggests that securities with equivalent risk (measured by beta) should offer the same expected return to compensate for that risk. This is a fundamental principle in finance that underlies the idea of a risk-return tradeoff.

All Securities in an Equivalent Risk Class Are Priced to Offer