If the Firm Is Maximizing Profits (Minimizing Losses),they Are Making

question 91

Multiple Choice

If the firm is maximizing profits (minimizing losses) ,they are making a profit or loss of about $____.

• A)-1,000
• B)500
• C)2,000
• D)2,500
• E)3,000

---

Definitions:

Roll's Critique

A theoretical argument suggesting that it is impossible to create a truly diversified market portfolio due to the vast number of assets in existence.

CAPM

Capital Asset Pricing Model, a formula used to determine the expected return on an investment based on its risk relative to the overall market.

True Market Portfolio

A theoretical bundle of all possible investments that are weighted by market value.

Stock's Alpha

Stock's Alpha measures a stock's performance relative to a benchmark index, indicating its value added or lost against the market average.