The Accounting Principle That Relates to More, Rather Than Less

question 13

Multiple Choice

The accounting principle that relates to more, rather than less, extensive footnotes in reports is known as ________.

• A)secrecy
• B)measurement
• C)conservatism
• D)transparency

---

Definitions:

CAPM

The Capital Asset Pricing Model, a theory used to determine the expected return on an investment, factoring in risk and the time value of money.

Risk-free Rate

The return on an investment with zero risk, typically represented by the yield on government securities.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, used in finance to price risky securities.

William Sharpe

An economist who created the Sharpe Ratio, a measure to calculate risk-adjusted return.