The Capital Assets Pricing Model (CAPM)shows that the expected return for a particular asset depends mostly on:
A)the expected dividend growth
B)the pure time value of money
C)the reward for bearing non-systematic risk
D)the amount of non-systematic risk
E)the state of economy

Question

Quizplus · Accepted Answer

The CAPM indicates that the expected return on an asset is determined by the risk-free rate (pure time value of money), the asset's beta (systematic risk), and the market risk premium. Non-systematic risk is not rewarded in CAPM.

The Capital Assets Pricing Model (CAPM)shows That the Expected Return