All of the Following Questions Remain to Be Answered in the Real

question 114

Multiple Choice

All of the following questions remain to be answered in the real world except

• A) What is a good proxy for the market portfolio?
• B) What happens when you cannot borrow or lend at the risk free rate?
• C) How good is the capital asset model as a predictor?
• D) What is the beta of the market portfolio of risky assets?
• E) What is the stability of beta for individual stocks?

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Definitions:

Information and Communication Technologies

An umbrella term that includes all technologies for the manipulation and communication of information.

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies by reporting these profits as income.

Retained Earnings

Cumulative net income of a company that has not been distributed to shareholders as dividends, reinvested in the business.

Non-Controlling Interest

The equity in a subsidiary not attributable, directly or indirectly, to a parent company.