IDs and Paired-Concept Questions

question 25

Short Answer

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
-Liquidity,solvency

Understand the implication of risk aversion changes on cost of capital using the SML approach.

Recognize the factors affecting a firm's overall cost of equity.

Understand that the cost of equity is an estimate and not directly observable in the financial markets.

Know the variables affecting the security market line (SML) approach to estimating expected return on a risky asset.

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Definitions:

Bipolar Disorder

A brain disorder that causes extraordinary variations in a person's mood, ranging from depressive lows to highs of mania or hypomania.

Depressed Mood

A psychological state characterized by feelings of sadness, emptiness, or hopelessness.

Obsessive-Compulsive Disorder

A mental health disorder characterized by persistent, unwanted thoughts (obsessions) and repetitive behaviors (compulsions) as an attempt to alleviate anxiety.

Counting

The action of determining the total number of items in a group by assigning them numerical order.