The Primary Disadvantage of a BARS Is That It Is

question 10

Multiple Choice

The primary disadvantage of a BARS is that it is:

• A) Situation specific.
• B) Well understood by the staff.
• C) Too generalized.
• D) Expensive to develop.

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Definitions:

CAPM

The Capital Asset Pricing Model is a framework that explains the connection between the expected return on assets, especially stocks, and their systematic risk.

Characteristic Line

A line in finance that shows a security's expected returns as a function of the overall market's returns.

Market Return

The total return on investment, including capital gains and dividends, from investing in the stock market over a specific period.

CAPM Equation

The formula used in the Capital Asset Pricing Model that describes the relationship between the risk of an investment and its expected return.