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Question
According to the capital asset pricing model, which of the following will increase the expected rate of return on a security that has a beta that is less than that of the market? Assume the market rate of return is greater than the risk-free rate and both rates are positive.I. increase in the risk-free rate
II. decrease in the risk-free rate
III. increase in the market risk premium
IV. decrease in the market rate of return
A. I and III only
B. II and III only
C. I and IV only
D. II and IV only
E. II, III, and IV only
Answer
This answer is hidden. It contains 16 characters.
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