​Which of the Following Is a Result of the Presence

question 52

Multiple Choice

​Which of the following is a result of the presence of fraud prevention controls within an organization?

• A)​Employees are less likely to commit fraud.
• B)​The organization bonding insurance company will reduce its rate based on the controls in place.
• C)​The auditors will be less thorough during audits.
• D)​Employees feel more trusted.

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Definitions:

APT

Abbreviation for Arbitrage Pricing Theory, a multifactor financial model that describes the relationship between the return of a portfolio and the return of a single asset through a linear combination of macroeconomic factors.

CAPM

A model identifying the connection between the expected returns of assets, primarily shares, and their associated systematic risk, known as the Capital Asset Pricing Model.

Systematic Risk Factors

Market risks that affect the overall market and cannot be eliminated through diversification, such as interest rates, inflation, and economic cycles.

Equally-Weighted Portfolio

An investment portfolio where each asset is allocated the same proportion of the total investment.