General finance question [General Finance]Risk in financial management refers to:A. The certainty of future returnsB. The uncertainty of future returnsC. The cost of capitalD. The dividend payout ratio

B. The uncertainty of future returns.In finance, risk generally refers to the potential that actual…

Answered: [General Finance] Risk in financial…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter16: Capital Structure Decisions

Section: Chapter Questions

Problem 4MC

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What does the capital asset pricing model (CAPM) calculate? a. The expected rate of return on an individual stock with respect to the risk-free rate of return b. The expected rate of return of an individual stock based on its overall risk c. The expected rate of return of an individual stock with respect to its market risk only d. The expected rate of return of an individual stock reflecting its financial risk Clear my choice
Capital asset pricing theory asserts that portfolio returns are best explained by:a. Economic factors.b. Specific risk.c. Systematic risk.d. Diversification.
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2 i.Discuss the importance of using benchmarks in evaluating portfolio performance ii. Explain the concept of risk tolerance and how it differs from risk appetite iii. Describe the difference between inherent risk and residual risk in investing iv. Explain how the APT differs from the CAPM in terms of underlying assumptions and factors considered v. Explain the role of diversification in CAPM
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[General Finance] Risk in financial management refers to: A. The certainty of future returns B. The uncertainty of future returns C. The cost of capital D. The dividend payout ratio