The Theory That States the Value of a Security Depends

question 81

Multiple Choice

The theory that states the value of a security depends on the time value of money, the reward for bearing systematic risk, and the amount of systematic risk is called the:

• A) reward-to-risk ratio.
• B) efficient frontier.
• C) capital asset pricing model.
• D) market risk premium.
• E) market pricing theory.

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Definitions:

Gallons

A unit of volume for liquid measure equal to four quarts, used in both the US customary and British imperial systems.

Cereal

Grain-based food typically eaten as breakfast, made from processed grains and often fortified with vitamins and minerals.

Secondary Effect

The indirect consequences or impacts of an action or policy that may not be immediately apparent.

Cocaine

A powerful and illegal stimulant drug derived from the leaves of the coca plant, which can cause significant health and legal issues.