Multiple Choice Questions on CAPM describes the between risk and returns for securities ........ for Employee State Insurance Corporation (ESIC) Exam Preparation

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Multiple Choice Questions

CAPM describes the between risk and returns for securities ........

Principles of Accounting & Financial Management Cost of capital
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    CAPM describes the between risk and returns for securities.

     

    Linear relationship
     

    Correct Answer

    Hypothetical relationship
     

    Incorrect Answer

    No relationship
     

    Incorrect Answer

    Diagonal relationship.

    Incorrect Answer
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    Explanation:

    Answer:
    (A) Linear relationship

    The Capital Asset Pricing Model (CAPM) is the product of a financial investment theory that reflects the relationship between risk and expected return. The linear relationship means that taking extra risk will on average lead to higher returns.

    By: NIHARIKA WALIA
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