Which of the Following Is the Formula for the Accounting

question 157

Multiple Choice

Which of the following is the formula for the accounting rate of return?

---

Definitions:

Risk-Adjusted Returns

Investment returns which have been modified to account for the risk involved, providing a more accurate measure of performance.

High Beta Portfolios

Investment portfolios that are composed of stocks or financial instruments with a high beta, indicating higher volatility and potential for higher returns or losses compared to the market.

Low Beta Portfolios

Investment portfolios comprised of assets that have lower volatility and are less sensitive to market movements compared to the broader market.

Security Market Line

A line in the capital asset pricing model (CAPM) that depicts the relationship between the expected return of an investment and its risk.