a. What is the fundamental relationship between risk and return in well-functioning markets? b. What is the

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a. What is the fundamental relationship between risk and return in well-functioning markets?
b. What is the security market line? Why must all assets plot directly on it in a well-functioning market?
c. What is the capital asset pricing model (CAPM)? What does it tell us about the required return on a risky investment?

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Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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