If Beta Equals 70%,then Alpha

question 53

Multiple Choice

If beta equals 70%,then alpha

• A)equals 30%.
• B)equals 50%.
• C)equals 70%.
• D)cannot be determined from information provided.

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Definitions:

Payback Method

An investment appraisal technique that calculates the amount of time required for an investment to generate cash flows sufficient to recover its initial cost.

Cash Inflows

Money or equivalent value received by a business, often from operations, investments, or financing activities.

Discounting

The process of determining the present value of a future amount of money or stream of income.

Payback Period

The length of time it takes to recover the cost of an investment.