Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. in regards to the capm pricing model, what happens

In regards to the CAPM pricing model, what happens if one variable is changed? What way does...

50.1K

Verified Solution

Question

Finance

Inregards to the CAPM pricing model, what happens if one variable ischanged? What way does the risk premium, risk free rate, and betamove? Explain why.

Answer & Explanation Solved by verified expert
4.0 Ratings (587 Votes)
CAPM is given by cost of equity riskfree rate betamarket return riskfree rate If any of the variables are changed in the CAPM equation the cost of equity will also changeIf beta increases then cost of equity increases and if beta decreases cost of equity decreases    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Inregards to the CAPM pricing model, what happens if one variable ischanged? What way does the risk premium, risk free rate, and betamove? Explain why.

Other questions asked by students

Q

Time Value??Personal Finance Problem?? Misty needs to have ?$15 comma 00015,000 in 55 years to fulfill her goal of...

Finance
Q

One factor in rating a National Hockey League team is the mean weight of its players....

Basic Math
Q

Describe how an individual could possess XY chromosomes, yet appear as a female.

Medical Sciences
Q

Discuss in detail how you believe a systems approach to organizations development could benefit your organization.

General Management
Q

A customer service firm is having issues with managerial decision-making. The managers are basing their planning...

General Management
Q

Which of the following choices represents the expected behavior of a mutant that can longer...

Biology
Q

Use the Applying the Multiplication Rule flow chart interactive to answer the following question Two...

Statistics
Q

Partners in a general partnership have equal right to participate in the management of the...

Accounting
Q

Madden Electric began operations in 2010 and provides a one year warranty on the products...

Accounting
Q

Fleetway Transport is an Accelerated threshold 1 remitter. The statutory deductions withheld from the three...

Accounting
Q

Diane purchased a factory building on April 15,2019, for $15,000,000. She sells the factory building...

Accounting
Q

Model, Inc., produces model automobiles made from metal. It operates two production departments, Molding and...

Accounting