The Total Interest on a 5 Year 5 $\times$ 0052 $\times$ 5 = $2,600

question 30

True/False

The total interest on a 5 year 5.2% loan with a principal of $10,000 is 10,000 $\times$ 0.052 $\times$ 5 = $2,600.

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Definitions:

CAPM

Capital Asset Pricing Model, a financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Marginal Price

This is the cost of producing one additional unit of a good or service.

Zero-Beta Security

A financial instrument whose returns are not correlated with those of the market, meaning it has a beta of zero, thus not contributing to portfolio volatility.

Expected Return

The probability-weighted average of the possible outcomes.