Which of the Following Relations Is Not Correct

question 36

Multiple Choice

Which of the following relations is not correct?

• A)1 - MPC = MPS
• B)MPS = MPC + 1
• C)APS + APC = 1
• D)MPC + MPS = 1

Understand the Capital Asset Pricing Model (CAPM) and its assumptions.

Calculate appropriate hurdle rates using CAPM for capital budgeting decisions.

Understand the concept of beta and its relevance in measuring stock risk.

Differentiate between systematic and unsystematic risk.

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Definitions:

Production Costs

The total expenses incurred in manufacturing a product or providing a service, including materials, labor, and overhead.

Prospect Theory

A behavioral economic theory that describes how people make decisions based on perceived gains or losses rather than final outcomes, focusing on how individuals assess risk in the face of uncertainty.

Central Focus

The primary point of interest or activity in a given context or discussion.

Bads

Items or factors that negatively impact societal welfare or personal well-being, often considered the opposite of goods.