A Private Equity Firm Is a Group of Investors That

question 80

True/False

A private equity firm is a group of investors that buys up the publicly traded stock of a large corporation and then takes the corporation private.

---

Definitions:

Unadjusted Beta

The beta of a stock calculated directly from historical data, without applying any adjustments for its specific characteristics.

CAPM

The Capital Asset Pricing Model, a theory used to determine the expected return on an investment, factoring in risk and the time value of money.

Risk-free Rate

The return on an investment with zero risk, typically represented by the yield on government securities.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, used in finance to price risky securities.