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Basic Question 11 of 11

The CAPM asserts that ______

I. the expected returns of assets vary only by their systematic risk as measured by beta.
II. two assets with the same beta will have the same expected return irrespective of the nature of those assets.
III. all assets are defined only by their beta risk.

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

explain the capital asset pricing model (CAPM), including its assumptions, and the security market line (SML)

calculate and interpret the expected return of an asset using the CAPM

CFA® 2024 Level I Curriculum, Volume 2, Module 2.