There is debate in regard to the capital asset pricing model about the appropriate R_F, K_M, and stability of beta.

Question

Quizplus · Accepted Answer

When dealing with an individual security, the premium return for risk is not related to all the risk in the investment as measured by the standard deviation (σ). The reason for this is that the standard deviation includes two types of risk, but only one is accorded a premium return under the capital asset pricing model.

There Is Debate in Regard to the Capital Asset Pricing