Evaluate the Expression

question 22

Multiple Choice

Evaluate the expression.

• A) 4,096
• B) -1,024
• C) -6,561
• D) 6,561
• E) -4,096

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Definitions:

Security Market Line

A line representing the relationship between the expected return of a market security and its risk, as measured by beta.

Systematic Risk

The collective risk for all investments in a market or a specific part of the market that cannot be offset through diversification.

Unsystematic Risk

The danger linked to a certain company or sector that can be reduced by spreading investments across a varied portfolio.

Political Risk

The risk of loss faced by investors, corporations, and governments due to political decisions, unrest, or instability in a country.