According to the Capital Asset Pricing Model, a Security with a ________

question 32

Multiple Choice

According to the capital asset pricing model, a security with a ________.

• A) negative alpha is considered a good buy
• B) positive alpha is considered overpriced
• C) positive alpha is considered underpriced
• D) zero alpha is considered a good buy

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Definitions:

Loan Period

The duration of time from the initiation of a loan to its final due date, within which the borrower is expected to repay the borrowed amount along with interest.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Economic Resource

Assets, materials, or inputs used to produce goods and services and satisfy human wants, including land, labor, capital, and entrepreneurship.

Capital

Man-made physical objects (factories, roads) and intangible ideas (the recipe for cement) that do not directly satisfy human wants but which help to produce goods and services that do satisfy human wants; also called capital goods. One of the four economic resources.