The CAPM asserts that the only company specific factor affecting required return is:

A) market risk.
B) the risk-free rate.
C) investment risk.
D) risk aversion.

CAPM

The Capital Asset Pricing Model is a formula used to determine the expected return on an investment, factoring in its risk compared to the market.

Required Return

The smallest yearly percentage gain from an investment necessary to entice people or corporations to invest in a certain security or endeavor.

Risk Aversion

The tendency of investors to prefer lower risk or safer investments to avoid potential losses.