# Beta and CAPM Is it possible that a risky asset could have a beta of zero? Explain.

## Question:

Beta and CAPM Is it possible that a risky asset could have a beta of zero? Explain. Based on the CAPM, what is the expected return on such an asset? Is it possible that a risky asset could have a negative beta? What does the CAPM predict about the expected return on such an asset? Can you give an explanation for your answer?

Expected ReturnThe expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...

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## Fundamentals of Corporate Finance

**ISBN:** 978-0077861629

8th Edition

**Authors:** Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan