Why Has the Reputation of U

question 13

Multiple Choice

Why has the reputation of U.S. accounting standards decreased in recent years?

• A)The U.S. deficit is at a record high.
• B)Many U.S. businesses have declared bankruptcy.
• C)There have been some notable American accounting scandals, such as Enron.
• D)Lengthy prison sentences have been given to unethical American executives, such as Bernie Madoff.

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Definitions:

Risk-free Asset

An investment with a guaranteed return and no risk of loss, often represented by government bonds.

Beta

An evaluation of the consistent risk or volatility of a security or a portfolio relative to the overall market.

Portfolio Beta

A measure of the overall risk of a portfolio of investments, comparative to the market as a whole.

Risk-free Asset

An asset which is presumed to have a guaranteed return with no risk of financial loss.