32404402-172Bstudyguide - 1. In the context of the Capital...

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1. In the context of the Capital Asset Pricing Model (CAPM) the relevant measure of risk is: Beta, once, a portfolio is diversified, the only risk remaining is systematic risk, which is measured by beta 2. According to the Capital Asset Pricing Model (CAPM) a well diversified portfolio's rate of return is a function of: Market risk, with a diversified portfolio , the only risk remaining is market, or systematic, risk. This is the only risk that influences return according to the CAPM. 3. The market portfolio has a beta of 1, By definition, the beta of the market portfolio is 1
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4. Which statement is not true regarding the market portfolio? . A It includes all assets of the universe. B. It lies on the efficient frontier. C. All securities in the market portfolio are held in proportion to their market values. D. It is the tangency point between the capital market line and the indifference curve. E.
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32404402-172Bstudyguide - 1. In the context of the Capital...

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