Under the MACRS

question 74

Multiple Choice

Under the MACRS:

• A) all assets are depreciated over 5 years.
• B) depreciable percentages decline throughout the asset's class life.
• C) straight-line depreciation percentages are doubled.
• D) assets are assumed to be purchased and sold midyear.

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Definitions:

Beta

In finance, beta is a measure of a stock's volatility in relation to the overall market; a higher beta indicates greater volatility and therefore higher risk and potential return.

Required Return

The minimum expected yield by investors to compensate for the risk of an investment.

Security Market Line

A representation in financial markets that depicts the relationship between the risk of an asset and its expected return.

Expected Inflation Rate

The anticipated rate at which the general level of prices for goods and services will rise over a period of time.