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Explain how mandatory seat belt laws may reduce the negative externalities of risky behaviour.
NPV
Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.
Beta
A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole, where a beta greater than one indicates higher than market volatility and less than one indicates lower.
Security Market Line
The Security Market Line graphically represents the expected return of assets as a function of their systematic, non-diversifiable risk.
Risk-Adjusted Rate
A rate of return that has been adjusted to take into account the risk or volatility of the investment, providing a more accurate measure of its potential reward.
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