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The risk factor in CAPM is beta which is a proxy for how firm's stock price moves compared
with the market portfolio
True
False
Solution
The Asnwer is"TRUE"
Beta in Capital Asset Pricing Mode [CAPM] is a measure of non diversifiable risk which shows
how firms stock prices changes with the market forces. The Measure of Beta can be either
positive or negative. The term Beta also means Beta measures the risk of an individual stock
components to the market portfolio

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The risk factor in CAPM is beta which is a proxy for how firms sto.pdf

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