Question
The capital asset pricing model (CAPM) suggest that, the
cost of equity is a trade-off between :Solution
Unsystematic risk is the risk related to a particular company and this type of risk which can be eliminated by the investor through diversification of its investment, However systematic risk is market risk which includes Interest rate change, Inflation, Policy change etc. and is un-diversifiable and is measured through the Beta of the stock in the CAPM model. An investor undertakes risk by investing in the stock of a company in expectation of higher return. Higher risk is associated with greater probability of higher return and lower risk with a greater probability of smaller return. This trade-off is assumed by CAPM model also in the cost of equity.
A branch receives goods from the Head Office at an invoice price that includes a 25% markup on cost. If the invoice price of goods sent to the branch is...
Which is not the essential characteristic of Bill of exchange:
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Donation received by Non-Profit Organization for constructing college library is called:
Calculate the inventory turnover ratio:
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