Assume that the Capital Asset Pricing Model (CAPM) is used to form the weighted average cost of capital (WACC). What is CAPM? Explain its purpose in the market. "Total risk" can be defined as the sum of "systematic risk" and "unsystematic risk." Compare and contrast systematic risk and unsystematic risk, providing examples of each. 

How is total risk measured? How can risk be mitigated?

Answer rating: 100% (QA)

The Capital Asset Pricing Model CAPM is a financial model that helps in determining the expected return on an investment based on its systematic risk It is used to calculate the weighted average cost ... View the full answer