With the Single-Index Model, the Difference Between Actual Return and Expected

question 44

Multiple Choice

With the Single-index model, the difference between actual return and expected return given a particular market index is referred to as the:

• A) parameter
• B) unique part
• C) beta
• D) error term

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Definitions:

Net Present Value

A performance indicator for assessing an investment's profit, derived by taking away the current value of cash disbursements from the current value of cash incomes during a specific period.

Capital Expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Cash Inflows

The total amount of money being transferred into a business, typically measured within a specific time period.

Cash Outflows

Money that is spent or transferred out of a business, usually as a result of operational expenses, investments, or financing activities.