Capital asset pricing model influence financial decisions

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Question

Investors need to know how much risk they have to take to confidently expect a certain percentage return. Likewise, managers want to know what return shareholders require so that they can decide how to meet those expectations.

1. How does the Capital asset pricing model (CAPM) influence financial decisions regarding risk and return?

2. How does risk premiums influence financial decisions regarding risk and return?

Reference no: EM133306390

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