Systematic Risk Is Defined as Risk That

question 79

Multiple Choice

Systematic risk is defined as risk that

• A) Influences a large number of assets
• B) Is asset-specific
• C) Is expected
• D) Is diversifiable
• E) Relates to a specific firm

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Definitions:

Payback

The period of time required to recover the cost of an investment.

NPV

Net Present Value: a capital budgeting technique that determines the profitability of a project or investment.

WACC

A firm's Weighted Average Cost of Capital is derived by calculating the cost of capital for each capital category and then weighting these costs according to each category's presence in the total capital structure.

NPV

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.