Which of the following statements is true? A) Assets with lower levels of market risk will sell for higher prices. B) Assets with lower levels of market risk will have higher expected rates of return. C) Assets with higher levels of market risk will sell for higher prices. D) Assets with higher levels of market risk will have lower expected rates of return.

C) Assets with higher levels of market risk will sell for higher prices.

Explanation:

The Capital Asset Pricing Model (CAPM) is a term that explains the connection between systematic risk and expected return for assets, specifically on stocks.

Thus, investors expect to be repaid for risk and the time value of money they put in. This is depicted with the formula = ERi = Rf + Bi (ERm - Rf)

Where ERi = expected return of investment

Ri = Risk-free rate

Bi = Beta of the investment

ERm - Rf = market risk premium

Hence, it is assumed that, Assets with higher levels of market risk will sell for higher prices.

the definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry. a local bakery that employs 10 people is an example of a small business. a manufacturing facility that employees less than 500 people is an example of a small business.