What is this called again?

CFA Level I
#1

Rs = Beta (Rm - Rf) + Rf Rm - Rf = is called what? I know they are going to give you that and I am going to use it as Rm and totally screw up the problem.

#2

market risk premium

#3

Okay and Rm is the return on the market right? I know this sounds dumb, but I screw it up every time. I just needed to write it out. Thanks!

#4

correct, Rm is the expected return on the market

#5

market risk premium you need to remember… they loooove this question, i saw on cfp many times

#6

market risk premium is one of the discoveries of CAPM.