Quiz Ch 07 – Adoption of CAPM for Cost of Capital Estimation
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What percentage of financial managers employ CAPM for cost of capital estimation?
What percentage of financial managers employ CAPM for cost of capital estimation?
What is the method used to allocate the cost of multiple assets acquired in a basket purchase?
What does a stock’s alpha quantify?
Over what period of time are patents typically amortized?
How does the journal entry to amortize a copyright impact the accounting equation?
What is the impact of recording patent amortization expense on total assets and stockholders’ equity?
For which types of investments is the Security Market Line (SML) applicable, and for which types is the Capital Market Line (CML) applicable?
What strategy enables individuals to gain from an arbitrage opportunity?
What assumptions does the simple CAPM model make?
What is the benefit of a conservative policy toward capitalizing or expensing costs related to plant assets?