If the Market Is Efficient and Securities Are Priced Fairly

question 320

Multiple Choice

If the market is efficient and securities are priced fairly then the _____ will be constant for all securities.

• A) Systematic risk.
• B) Standard deviation.
• C) Reward-to-risk ratio.
• D) Beta.
• E) Risk premium.

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Definitions:

Accrual Basis

A financial recording technique that documents income and costs at the time they are generated or incurred, without consideration of when the actual cash transaction occurs.

Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income or loss.