When Working with T Accounts,an Important Rule to Remember Is

question 81

Multiple Choice

When working with T accounts,an important rule to remember is:

• A)when an account is debited,an amount is entered on the right-hand side on the T account.
• B)an increase to accounts payable will be recorded as a debit.
• C)to credit an account means to enter an amount on the right-hand side of the T account.
• D)the debit side of a T account is on the right-hand side of the T account for assets and expenses.

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Definitions:

Capital Asset Pricing Model

A model used to determine the theoretical rate of return of an asset, considering the asset’s risk relative to that of the market.

Beta

A measure used in finance to describe the relationship of an investment's returns with those of the market; it indicates the investment's risk compared to the market.

Rate of Return

The increase or decrease in the value of an investment throughout a certain timeframe, represented as a portion of the investment's initial cost.

Risk Premium

The risk premium is the extra return above the risk-free rate that investors demand as compensation for the risk of investing in a particular asset.