Which One of the Following Is the Theory That States

question 5

Multiple Choice

Which one of the following is the theory that states that the value of a security is dependent upon the pure time value of money, the reward for bearing systematic risk, and the amount of systematic risk?

• A)reward-to-risk theory
• B)capital asset pricing model
• C)risk premium proposal
• D)market slope hypothesis
• E)security market line proposition

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Definitions:

Deficit

An economic condition when a government's expenditures exceed its revenues, leading to borrowing or spending reserves.

National Debt

The sum of funds that a nation's government has acquired through different borrowing methods.

Deficit

A financial situation where expenses exceed revenues, income, or assets for a certain period, often referring to government budgets.

Federal Budget Deficit

The financial situation where the government's expenditures exceed its revenues in a given fiscal year, leading to borrowing.