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In the CAPM equation, Re stands for the expected return of the:
ABroker
BAsset
CMarket
DBond
Answer & Solution
Correct answer: B. Asset
1. Each symbol in the equation has a defined meaning.
2. The CAPM equation has three named quantities.
3. Re is the expected return of the asset.
4. Rf and Rm are the other two.
_Source: OpenStax Principles of Finance (CC BY 4.0), Ch 15 'Risk, Return, and Capital Market Theory'_
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