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Section A (1 Mark)In terms of the risk/return relationship

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Section A (1 Mark)

In terms of the risk/return relationship

A.

Only factor risk commands a risk premium in market equilibrium.

B.

Only systematic risk is related to expected returns.

C.

Only nonsystematic risk is related to expected returns.

D.

A and B.

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Section B (2 Mark)Which of the following statement is/are correct?
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