$17$

The expected return$-$beta relationship:

Multiple Choice

$00\mathrm{.}48\mathrm{.}25$

assumes that investors hold well$-$diversitied portfolios.

refers to the way in which the covariance between the returns on a stock and returns on the market measures the contribution of the stock to the variance of the market portfolio, which is beta.

All of the options are true.

None of the options are true.

is the most familiar expression of the CAPM to practitioners.