The Capital Asset Pricing Model

question 13

Multiple Choice

The Capital Asset Pricing Model:

• A)has serious flaws because of its complexity.
• B)measures relevant risk of a security and shows the relationship between risk and expected return.
• C)was developed by Markowitz in the 1930s.
• D)discounts almost all of the Markowitz portfolio theory.

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Definitions:

OASDI

Old-Age, Survivors, and Disability Insurance, a comprehensive federal benefits program that provides retirement, disability, and survivor benefits.

Hospital Insurance

A type of insurance coverage that specifically covers the costs of hospital stays and associated medical services.

Withholding Allowance

Refers to an exemption that reduces how much income tax an employer deducts from an employee's paycheck.

Withholding Allowance

A determination for the amount of an employee's pay that should not be subject to income tax withholding, directly affecting their take-home pay.