Which of the Following Is the Best Definition of Capital

question 286

Multiple Choice

Which of the following is the best definition of capital asset pricing model (CAPM) ?

• A) Percentage of a portfolio's total value in a particular asset.
• B) Group of assets such as stocks and bonds held by an investor.
• C) The difference between the return on a risky investment and a risk-free investment
• D) Return on a risky asset expected in the future.
• E) Equation of the SML showing the relationship between expected return and beta.

---

Definitions:

Traditional Format

In accounting, refers to the conventional presentation of financial statements, including the income statement that separates costs into fixed and variable categories.

Contribution Format

An income statement format that separates fixed costs from variable costs to show the contribution margin.

Merchandising Company

A business that purchases finished goods for resale, making a profit by selling them at a higher price than the cost.

Product Cost

The total costs directly tied to the production of a product, including raw materials, labor, and overhead expenses.