___________ a Relationship Between Expected Return and Risk

question 31

Multiple Choice

___________ a relationship between expected return and risk.

• A) APT stipulates
• B) CAPM stipulates
• C) Both CAPM and APT stipulate
• D) Neither CAPM nor APT stipulate
• E) No pricing model has been found.

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Definitions:

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock.

Market Price

The present cost at which a service or asset is available for purchase or sale.

Par Value Common Stock

The nominal or face value assigned to common shares in the charter of a corporation, which has little relation to the market value.

Paid-in Capital

The amount of money shareholders have invested in a company in exchange for equity, excluding any earnings retained by the company.