In the Context of the Major Components of an Information

question 73

Multiple Choice

In the context of the major components of an information system, which of the following is a difference between information and data?

• A) Unlike data, information is considered the input to an information system.
• B) Unlike data, information can be collected in aggregated and disaggregated forms.
• C) Unlike data, information by itself is difficult to use for making decisions.
• D) Unlike data, information consists of facts that have been analyzed by the process component.

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Definitions:

Market Risk Premium

The extra return expected by investors for taking on the risk of investing in the stock market over a risk-free rate.

Security Market Line

A line representing the relationship between the expected return of a market security and its risk, as measured by beta.

Systematic Risk

The collective risk for all investments in a market or a specific part of the market that cannot be offset through diversification.

Unsystematic Risk

The danger linked to a certain company or sector that can be reduced by spreading investments across a varied portfolio.