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To Find a Better Method When Analyzing a Process

question 12

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To find a better method when analyzing a process:


Definitions:

Security Market Line

A representation in the capital asset pricing model (CAPM) showing the relationship between expected return and systematic risk.

Risk Premium

The extra return expected by an investor for holding a risky asset instead of a risk-free asset.

Expected Return

The average return an investor anticipates on an investment which is uncertain, based on the probable returns.

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