List and Briefly Discuss the Five Components of Internal Control

question 161

Essay

List and briefly discuss the five components of internal control.

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Definitions:

Bonds

Fixed income investment products that represent a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest payments and the return of the principal at maturity.

Jensen's Measure

A performance evaluation metric that measures the excess return of an investment portfolio over the predicted return, adjusted for market risk.

Residual Standard Deviation

A measure of the amount of variability in a set of residuals not explained by the predictive variables in a regression model.

Beta

A measure of a stock's volatility in relation to the overall market, indicating its risk relative to the market average.