Question

What is the primary purpose of the Capital Asset Pricing Model (CAPM)?

a.

To predict the future performance of individual stocks

b.

To evaluate the overall risk associated with investing in the stock market

c.

To determine the appropriate risk premium for investing in specific companies

d.

To identify the most profitable investment opportunities

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).To evaluate the overall risk associated with investing in the stock market Explanation:The primary purpose of the Capital Asset Pricing Model (CAPM) is to evaluate the overall risk associated with investing in the stock market by considering systematic or non-specific risks.

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Q. What is the primary purpose of the Capital Asset Pricing Model (CAPM)?
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