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CAPM says that portfolio returns are best explained by: Group of answer choices Systematic risk Specific risk Economic factors Diversification

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User JPocoata
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1 Answer

1 vote

Answer:

Systematic risk

Step-by-step explanation:

According to CAPM,

the expected return = risk free rate + ( beta x market premium)

Beta measures systemic risk

Systemic risk is risk inherent in a market and cannot be eliminated by diversifying portfolio. It is also known as market risk.

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User Elirandav
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