Which of the Following Is Included in M1

question 269

Multiple Choice

Which of the following is included in M1?

• A) the $200 you charged on your credit card to purchase your textbooks
• B) the $200 check you wrote to purchase your textbooks
• C) the $200 in cash you used to purchase your textbooks
• D) the $200 loan you arranged to purchase your textbooks

---

Definitions:

CAPM (Capital Asset Pricing Model)

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government securities.

Market Risk Premium

An additional expected return that investors demand for choosing to invest in the stock market over a risk-free investment, reflecting the extra risk assumed.

Average Stock

The average price of a company's stock over a specific period, which can indicate the stock's general trend.