The Security Market Line Approach

question 360

Multiple Choice

The security market line approach:

• A) Provides an actual cost of equity because the risk level of the firm is known with certainty.
• B) Provides an actual cost of equity because the market risk premium is constant over time and across assets.
• C) Relies on the past as a predictor of the future.
• D) Is less applicable to business firms than the dividend growth model.
• E) Considers the projected growth rate of the firm.

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Definitions:

ICD-9-PCS

International Classification of Diseases, Ninth Revision, Procedure Coding System; a system used in the United States for classifying medical procedures for billing and documentation.

Diagnosis Code

Diagnosis Code refers to a code assigned to a diagnosis based on a standardized system, such as the International Classification of Diseases (ICD), used for healthcare billing and statistics.

Upcoding

Reporting a higher-level code than is appropriate for the service that was rendered, resulting in higher reimbursement; when a facility coder assigns a diagnosis code that does not match patient documentation, with the intention of increasing reimbursement to the facility through the DRG system, serious penalties and fines will be levied against the facility for submitting fraudulent claims.

DRG System

Diagnosis-Related Group (DRG) system is a way of categorizing hospital cases into groups for the purposes of payment, reflecting typical resource usage for a stay.