A Basic Assumption of the Markowitz Model Is That Investors

question 105

True/False

A basic assumption of the Markowitz model is that investors base decisions solely on expected return and risk.

---

Definitions:

Financial Leverage

Utilization of debt to expand the potential profitability of an investment.

Times Interest Earned

A financial ratio that measures a company’s ability to meet its interest payments on outstanding debt.

EBIT

EBIT, or Earnings Before Interest and Taxes, represents a company's profit figure that does not take into account expenses stemming from interest and income taxes.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically presented in the income statement.