Which of the Following Is NOT a Key Variable in the Equation

question 68

Multiple Choice

Which of the following is NOT a key variable in the equation for the capital asset pricing model?

• A) the risk-free rate of interest
• B) the expected rate of return on the market portfolio
• C) the marginal tax rate
• D) All are important components of the CAPM.

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Definitions:

Profitability

The financial metric that measures the degree to which a business or activity yields profit or financial gain.

Quarterly Return

The Employer’s Quarterly Federal Tax Return, a form submitted to the IRS every 3 months that summarizes the federal income and employment taxes withheld from employees’ paychecks.

Revenue

The total income generated from goods sold or services provided by a business, which can be before or after any deductions are made.

Expenses

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.