Suppose That You Are Buying Some Antique Furniture

question 19

Multiple Choice

Suppose that you are buying some antique furniture. Why should you hire an expert to appraise it?

• A) The antique may not be genuine.
• B) The market price of antiques fluctuates over time.
• C) The price of antiques varies with demand and supply.
• D) Buying antiques is risky.

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Definitions:

CAPM

The Capital Asset Pricing Model, a financial theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Firm-Specific Factors

Unique characteristics or circumstances affecting a company that can influence its stock's performance, unrelated to the overall market movements.

Common Macroeconomic Factor

Economic variables that affect a broad segment of the economy and consequently can influence the performance and value of financial investments.

Uncertainty

The degree of variability in investment returns, often associated with the lack of predictability in markets and future events.