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  • 19-08-2020
  • Business
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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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ewomazinoade ewomazinoade
  • 22-08-2020

Answer:

Systematic risk

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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