Provide an Appropriate Response

question 49

Multiple Choice

Provide an appropriate response.
-Use the graph to find the slope, x-intercept and y-intercept of the line.

• A) slope = -1
• B) slope = 1 x-intercept = (7, 0) x-intercept = (7, 0) Y-intercept = (0, -7) y-intercept = (0, -7)
• C) slope = 1
• D) slope = - 1 x-intercept = (0, 7) x-intercept = (-7, 0) Y-intercept = (-7, 0) y-intercept = (0, 7)

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Definitions:

Required Return

The minimum rate of return on an investment that is necessary for an investor to consider making that investment.

Market Risk

The risk of losses in positions arising from movements in market prices.

Diversify

The strategy of spreading investments across various financial assets, industries, or other categories to reduce risk.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks; it is used to estimate the cost of equity.