Epsilon Inc Has Recently Retained the Services of Noriko as In-

question 1

Multiple Choice

Epsilon Inc has recently retained the services of Noriko as in- house counsel. Which of the following statements is most likely TRUE?

• A) Epsilon Inc has probably made a mistake because, like most in- house counsel, Noriko is probably available because she cannot find work in a law firm.
• B) Noriko can both help to resolve legal problems and help to prevent legal problems from arising in the first place .
• C) Noriko may provide advice to Epsilon, but she cannot represent the company in court.
• D) Although Noriko is not an employee of Epsilon Inc, she can be called in from her law firm whenever the company has a legal problem.
• E) Epsilon Inc has hired Noriko for the purpose of resolving a single legal problem that it expects will drag on for several years.

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Definitions:

Capital Asset Pricing Model

An approach outlining the connection between inherent risks and the expected return of assets, with a focus on stocks.

SML

The Security Market Line, a graphical representation used in the capital asset pricing model (CAPM) to show the relationship between the risk of an investment and its expected return.

Expected Return

The anticipated gain or loss on an investment, considering both the risk and return.

Expected Return

Expected return is the anticipated profit or loss from an investment, based on the potential outcomes and their probabilities, often used to evaluate investment choices.