What Is Budgetary Slack and Why Is It an Issue

question 24

Essay

What is budgetary slack and why is it an issue in budget preparation?

Describe the impact of the risk-free rate on stock and portfolio returns.

Distinguish between systematic (market) risk and unsystematic (diversifiable) risk.

Understand the Capital Asset Pricing Model (CAPM) and its applications to investment decisions.

Analyze the impact of portfolio composition on expected return and risk.

---

Definitions:

Basilar Membrane

A structure in the cochlea of the inner ear that plays a key role in the perception of sound, vibrating in response to sound waves and thereby stimulating hair cells to send nerve impulses to the brain.

Eardrum

A slender membrane dividing the external ear from the middle ear, which oscillates when hit by sound waves.

Oval Window

The membrane-covered opening that leads from the middle ear to the vestibule of the inner ear and is involved in the process of hearing.

Amplitude

In the context of waves, it is the height of the wave, which can determine the intensity or loudness of a sound.