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Identify the risk and the return in each of the following examples.
a. Investing $500 in a certificate of deposit at 4.5% interest.
b. Placing a $100 bet on an NBA game.
c. Investing $10,000 in Microsoft stock.
d. Borrowing $20,000 in student loans.
Impairment
A reduction in the recoverable value of a fixed asset or goodwill below its carrying amount on the balance sheet.
Dividends
Dividends are a portion of a company's earnings that are distributed to its shareholders as a reward for their investment.
Impairment Loss
A charge against earnings representing the amount by which the carrying amount of an asset exceeds its recoverable amount.
Goodwill
An intangible asset that arises when a company acquires another business for more than the fair value of its net tangible and identifiable intangible assets.
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