You Have the Following Data on the Securities of Three

question 84

Multiple Choice

You have the following data on the securities of three firms:

If the risk-free rate last year was 3%,and the return on the market was 11%,which firm had the best performance on a risk-adjusted basis?

• A) Firm A
• B) Firm B
• C) Firm C
• D) There is no difference in performance on a risk-adjusted basis

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Definitions:

Customer Discount

A reduction in the price of goods or services offered to customers, usually to encourage prompt payment or increase sales volume.

Trade Discounts

A reduction in the listed price of a product or service, offered by sellers to buyers in the commercial market.

Sales Tax

A government-imposed tax on the sale of goods and services, which is typically a percentage of the sales price paid by the consumer.

Sales Account

An account in a company's financial records that tracks the revenue generated from goods and services sold.