Final answer:
The Capital Asset Pricing Model (CAPM) is indeed used to determine the required rate of return on equity which takes into account the investment's relative risk compared to the market.
Step-by-step explanation:
The student's question pertains to whether CAPM (Capital Asset Pricing Model) is used to determine the required rate of return. The answer is A. True. The CAPM model indeed helps in calculating the required rate of return on equity considering the risk-free rate of return, the market return, and the beta of the individual investment compared to the market. It reflects the expected return of an asset and compensates investors for taking on the additional risk compared to holding a risk-free asset.