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Basic Question 3 of 11
The market risk premium is the ______.
B. difference between the rate of return on the market portfolio and the risk-free rate
C. market rate of return
A. difference between the rate of return on an asset and the risk-free rate
B. difference between the rate of return on the market portfolio and the risk-free rate
C. market rate of return
User Contributed Comments 3
| User | Comment |
|---|---|
| gravy | Why isn't it A also? Can't u have market risk premium on a single stock? |
| yly14 | MARKET risk premium. And lets call stock risk premium on a single stock. |
| davcer | gravy A woul be correct for the CAL |
Your review questions and global ranking system were so helpful.
Lina
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® 2025 Level I Curriculum, Volume 2, Module 2.