What Is COLA

question 93

Multiple Choice

What is COLA?

• A) A promise by management that wages will increase semi-annually
• B) The consumer price index
• C) A method used to measure wages vs.GDP
• D) An agreement to provide soft drinks for workers on their coffee breaks
• E) A contract clause relating wage increases to inflation

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Definitions:

Security Market Line

A graphical representation of the Capital Asset Pricing Model, showing the relationship between the expected return of a security and its systemic risk as measured by beta.

APT

APT, or Arbitrage Pricing Theory, is a financial model that estimates the returns on an asset based on its risk in relation to multiple risk factors.

Well-Diversified Portfolio

A collection of investments that spread out risk by incorporating a wide variety of assets, thereby minimizing the impact of any single asset's performance on the overall portfolio.

Fama and French

Two economists known for their research on the factors that influence stock returns, notably the three-factor model which includes market risk, size, and value factors in explaining stock returns.