Answer:
a. True
Explanation:
As we know that
Under CAPM, the cost of the capital is
= risk free rate of return + beta × (market rate of return - risk free rate of return)
= risk free rate of return + beta × market risk premium
So it shows the relationship between the risk and return on which the expected risk premium equivalent to the beta and the same should be multiplied with the market return
Therefore the given statement is true
