easy · Principles of Finance risk-return-portfolio
When using the Capital Asset Pricing Model (CAPM) to find the required return on a stock, which of the following best describes the 'Market Risk Premium'?
- The stock's beta multiplied directly by the market's total realized return.
- The total standard deviation of returns on the overall market portfolio.
- The yield currently offered on a long-term government bond issue.
- The expected return on the market portfolio minus the risk-free rate.
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