Question
According to the CAPM model, Expected Return = Risk
free rate + Risk premium. Here, what does the risk-free rate compensate the investor for?Solution
The CAPM compensates investors for the time value of their money. In theory, the risk-free interest rate is the minimum return an investor expects for any investment because he will not accept additional risk unless the potential rate of return is greater than the risk-free rate. In practice, risk free rate does not exist because even the safest investments carry a very small amount of risk. However, the long-term G-sec rate is used as a proxy to risk-free rate of return (in India 10-year G-sec rate is used as risk free rate).
In the question below some statements are given followed by three conclusions I, II and III. You have to take the given statements to be true even if t...
Statements :
All SBI is RBI.
Only a few RBI is UCO.
Only a few UCO is UGB.
No UGB is IDBI.
Conclusions :
I. ...
Statements:Â Â Â Â Â Â Some doctors are painters
 All painters are directors.
 All directors are reporters
Conclusions:Â ...
Conclusions:
I. Some Medicines are not Pills.
II. Some Tablets being Medicines is a possibility.
Statements:
Statements:
Some pole are rope.
Some rope are tyre.
Only tyre is wheel.
Some engine are tyre.
Conclusions:
I. ...
Statements:Some villages are towns.
Some towns are huts.
All huts are rivers.
Some rivers are tents.
Conclusions:I. Some t...
- Statements:
Only a few device is system
Mostly system is tablet
Conclusions:
I. All device can be system
II. Few ta... Statements:
Only Biscuit are Chocolate.
Only few Biscuit are Snacks.
All Snacks are Beverages.
Conclusion:
Some B...
In each of the questions below are given three statements followed by two conclusions numbered I and II. You have to take the given statements to be ...
Statement:
Only GMs are PMs
Only a few CMs are president
No president is PM
Conclusion:
I. Some GMs are presidents
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