Which of the Following Terms Does Not Mean the Same

question 199

Multiple Choice

Which of the following terms does not mean the same as the others?

• A) Book value
• B) Salvage value
• C) Scrap value
• D) Disposal value

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Definitions:

Single Factor Model

A financial model that describes the return on a security as a function of a single factor, typically the market return, plus security-specific variations.

Risk Premium

The extra return expected by an investor for holding a risky asset instead of a risk-free asset, serving as compensation for bearing additional risk.

Arbitrage Opportunity

An arbitrage opportunity is the chance to buy an asset at a low price in one market and sell it at a higher price in another, taking advantage of the price difference for profit.

Expected Return

The anticipated amount of returns an investment is expected to generate, calculated as a weighted average of possible returns, based on their probabilities.