An Obligation of a Business That Represents the Claims of Others

question 203

Multiple Choice

An obligation of a business that represents the claims of others against the assets of the business is called a(n) :

• A)Expense.
• B)Equity.
• C)Liability.
• D)Revenue.
• E)Asset.

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Definitions:

Expected Return

The weighted average of all possible returns for a given investment, with weights being the probabilities of each outcome.

Risk-Free Rate

The hypothetical return rate on an investment that carries no risk of losing money, commonly illustrated by the interest rate on government securities.

Multifactor Model

A financial model that employs multiple factors in its calculations to explain market phenomena and/or equilibrium asset prices.