Which Three of the Following Are Among the Difficulties Encountered

question 17

Multiple Choice

Which three of the following are among the difficulties encountered when computing required rates of return?

• A) Obtaining the riskfree rate
• B) Estimating the equity risk premium
• C) Creating a maximised gearing level
• D) The unreliability of the CAPM's beta

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Definitions:

Adaptive Quality

Traits or behaviors that enhance an organism's ability to survive and reproduce in its environment.

Fight-or-flight Response

An automatic physiological reaction to an event that is perceived as stressful or frightening, preparing the body to either fight or flee from the threat.

Fight-or-flight Response

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival, mobilizing the body for quick action.

Involuntary Reaction

A reflex or response to a stimulus that is automatic and not under the conscious control of an individual.