A Firm with an Inventory Period of 30 Days, an Accounts

question 131

Multiple Choice

A firm with an inventory period of 30 days, an accounts receivable period of 30 days, and an accounts payable period of 90 days has an operating cycle of _____ days.

• A) 60
• B) -60
• C) 30
• D) -30

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Definitions:

Market Risk Premium

The additional return an investor demands for taking on the risk of investing in the stock market over a risk-free rate.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio compared to the entire market.

Portfolio P

This term typically represents a specific set of investments held by an individual or organization, potentially including stocks, bonds, and other assets.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level.