The CAL Provided by Combinations of 1-Month T-Bills and a Broad

question 48

Multiple Choice

The CAL provided by combinations of 1-month T-bills and a broad index of common stocks is called the ________.

• A) SML
• B) CAPM
• C) CML
• D) total return line

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Definitions:

Surplus Cash

Excess funds that a company has after covering all its operational expenses, investments, and financial obligations.

Dividends

Distributions to shareholders from a corporation, often sourced from the entity's earnings.

Stock Dividend

A form of dividend payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Sufficient Cash

A financial state indicating that a business or individual possesses enough liquid assets to meet operational expenses and financial obligations.