Explanation:
The Capital Asset Pricing Model (CAPM) is a model used in finance to determine a theoretically appropriate required rate of return of an asset, given that asset's systematic, non-diversifiable risk. Systematic risk, also known as market risk or non-diversifiable risk, is the risk that affects all companies in the market. It is the risk that cannot be eliminated by diversification. Examples...
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Q.199 According to CAPM, which of the following risks should an investor be compensated for?
A
Systematic risk only.
B
Unsystematic risk only.
C
Both systematic and unsystematic risk.
D
Both systematic risk and asset-specific risk.
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