The Expected Return on a Security Depends on Which of the Following

question 26

Multiple Choice

The expected return on a security depends on which of the following?
I.Risk-free rate of return
II.Amount of the security's unique risk
III Market rate of return
IV.Standard deviation of returns

• A)I and III only
• B)II and IV only
• C)II, III, and IV only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Spending Variance

A financial metric that indicates the difference between the budgeted or planned amount of spending and the actual amount spent.

Flexible Budget

A budget that is adaptable and varies according to the changes in activity level or volume.

Net Operating Income

The profit generated from a company's core business operations, excluding deductions of taxes and interest.

Facility Expenses

Costs associated with the physical locations a business operates, including utilities, maintenance, and rent or mortgage payments.