A Basic Assumption of the CAPM Is That Investors Evaluate

question 3

Multiple Choice

A basic assumption of the CAPM is that investors evaluate portfolios by looking at the expected returns and standard deviations of the portfolios over a

• A) single period horizon
• B) multiple period horizon
• C) continuous time period
• D) finite time period

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Definitions:

Income Statement

A financial statement that reports a company's revenues, expenses, and profits over a specific period, showing how net income is derived from business operations.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments, used to prepare financial statements.

End-of-period Spreadsheet

A tool used for adjusting and closing entries and for preparing financial statements at the end of an accounting period.

Adjusting Entries

Entries made in accounting to update the records for any incomes and expenses that have been incurred but not yet recorded.