key conclusion of the Capital Asset Pricing Model is that the value of an asset should be measured by considering both the risk and the expected return of the asset, assuming that the asset is held in a well-diversified portfolio The risk of the asset held in isolation is not relevant under the CAPM.

Question

Quizplus · Accepted Answer

The CAPM considers the risk and expected return of an asset within a well-diversified portfolio, not in isolation. Therefore, the risk of the asset held in isolation is not relevant.

Key Conclusion of the Capital Asset Pricing Model Is That