Identify and Describe Each of the Three Components of a Security's

question 74

Short Answer

Identify and describe each of the three components of a security's expected return according to the capital asset pricing model.

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Definitions:

Inelastic Portion

The segment of a demand curve where buyers are less responsive to changes in price, indicating that the quantity demanded changes little with a significant price fluctuation.

Marginal Revenue

The additional earnings obtained from the sale of one extra unit of a product or service.

Average Total Cost

The total cost of production divided by the number of units produced, representing the average cost per unit.

Average Variable Cost

The sum of all costs that vary with output levels, when divided by the total output produced.