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A strong family link is especially evident in the development of
Risk-free Rate
The anticipated earnings on an investment considered free from financial risk, usually related to sovereign bonds.
Arbitrage Opportunity
This refers to the chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another, realizing a profit without risk.
Expected Return
The weighted average of all possible returns from an investment, factoring in the probabilities of each outcome.
Firm-characteristic Variables
Factors specific to a company that can influence its stock price, such as size, earnings, and debt levels.
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