Which One of the Following Is an Economic Obligation for a Business

question 125

Multiple Choice

Which one of the following is an economic obligation for a business entity?

• A)Salaries paid to employees for services rendered
• B)Materials used in manufacturing products
• C)Amounts owed to creditors
• D)Payment of rent for the next year

---

Definitions:

Return

The profit or deficit experienced on an investment during a given period, represented as a percentage of the original investment's value.

Security Market Line

A line that represents the relationship between the risk of an investment and its expected return, used in the capital asset pricing model.

Market Risk Premium

The additional return expected by investors for taking on the higher risk of investing in the stock market over a risk-free rate.

Beta

A measure of a stock's volatility in comparison to the overall market; a beta above 1 indicates greater volatility than the market.