3.The capital asset pricing model is given by: R_i =R_f + Beta ( R_m -R_f) where R_m = expected return on the market, R_f = risk-free market and R_i = expected return on a specific firm. The dependent variable in this model is:

A)   R_f.

B)   R_i.

C)   R_m.

D)   R_m - R_f.

The correct answer was B)

The dependent variable is the variable whose variation is explained by the other variables. Here, the variation in r_i is explained by the variation in the other variables, r_f and r_m.