The Capital Asset Pricing Model (CAPM) describes the

The Capital Asset Pricing Model CAPM calculates the required return on an asset based on its systematic risk Beta relative to the overall market.

relationship between:

A Business risk and financial risk. Correct Answer Incorrect Answer

B Systematic risk and expected return. Correct Answer Incorrect Answer

C Operating leverage and financial leverage. Correct Answer Incorrect Answer

D Debt and equity. Correct Answer Incorrect Answer

E Dividend policy and share price. Correct Answer Incorrect Answer

Solution

The Capital Asset Pricing Model (CAPM) calculates the required return on an asset based on its systematic risk (Beta) relative to the overall market.

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