Which of the Following Statements Is True

question 43

Multiple Choice

Which of the following statements is true?

• A)In CAPM, it is assumed that systematic and unsystematic risk are positively correlated.
• B)In CAPM, it is assumed that systematic and unsystematic risk are negatively correlated.
• C)In CAPM, it is assumed that systematic and unsystematic risk are independent of each other.
• D)None of the listed options are correct.

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Definitions:

Goodwill

An intangible asset that represents the excess of the purchase price over the fair market value of an acquired business's identifiable net assets.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from total revenue, indicating the company’s profitability over a specific time period.

Equity Method

An accounting technique used by companies to assess the profits earned through their investments in other companies, reflecting these profits as income.

Dividends

Payments made by a corporation to its shareholders from its profits or reserves, usually in the form of cash or additional shares.