According to the Capital Asset Pricing Model (CAPM): The stock's required rate of return increases...
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According to the Capital Asset Pricing Model (CAPM): The stock's required rate of return increases when the stock's systematic risk increases, holding all else constant. The market risk premium is positively related to the strength of the U.S. dollar. The stock's required rate of return is a function of the stock's systematic risk, the risk-free rate, and the currency risk premium The relevant measure of a stock's risk is the standard deviation of returns
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