Briefly explain the assumptions of CAPM

Q: Discuss the differences between an implicit guarantee, a specific result guarantee, and an…

A: Financial guarantee is a promise that the guarantor gives about taking responsibility of paying…

Q: Define the Base Case and the Proposed Alternatives?

A: The base case is the output expected from the basic assumption made by the project team. The basic…

Q: Are you convinced that the APT model is superior than CAPM? If yes or no, why?

A: APT theory is referred to as the multi-factored macro-economics regarding an asset pricing model on…

Q: What is the going concern assumption?

A: Going concern Assumption: On the basis of Going concern assumption Financial statements are…

Q: Explain why NPV is the best criterion and how it overcomes problems inherent in the other methods.

A: The "value derived from the use of money over time as a consequence of investment and reinvestment"…

Q: What assumptions underlie the EOQ model?

A: The model that helps in calculating the optimal amount of quantity needs to be purchase for…

Q: Explain constant prepayment assumptions?

A: Prepayment refers to the settlement of debt before its actual due date. The model which determines…

Q: Explain pure expectations theory

A: It estimates the future interest without considering the maturity risk. According to the expectation…

Q: “CVP analysis is both simple and simplistic. If you want realistic analysis to underpin your…

A: CVP analysis refers to the cost-volume-profit analysis which describes the change in the operating…

Q: QUESTION 28 The kind of analysis that consists of rerunning the model to determine the effect on the…

A: There are various financial model used to analyze data.

Q: Why is it more accurate to describe the subject matter as CVP analysis rather than as breakeven…

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: What are the arguments for and against 'Stakeholder Theory'? Examine several arguments for and…

A: Stakeholder Theory is an idea about how business really works. According to it, for any business to…

Q: How can you partically alleviate the various drawbacks of IRR?

A: Internal rate of return (IRR) is one of the capital budgeting techniques which is used to measure…

Q: Conduct Breusch-Godfrey test the hypothesis stated?

A:

Q: explain why the author's assessment of the appropriateness of the going concern assumptions is so…

A: Going Concern Assumption- As per the going concern assumption business will continue its…

Q: t is “inquiry” and “observation” procedures? Give the strengths and weaknesses of these tests?

A: This method is often used in conjunction with other, more reliable method. For example, an auditor…

Q: How are Sensitivty Analysis and Scenario Analysis different in details?

A: Sensitivity analysis is the evaluation of the impact on the project when there may be a few…

Q: Which of the following statement is correct?

A: Pecking Order Theory: As per this theory, the preference for sources for funds is first retained…

Q: Would you say this chart  is a technical or a fundamental analysis? Give reasons for your  answer?

A: The question is based on the concept of analysis of stock performance. Fundamental and technical…

Q: Is the following statement true or false? Explain your answer.

A: Step 1   Portfolio diversification is the act of investing your money across a variety of asset…

Q: For practical applicationsas opposed to theoretical considerations, which ismore relevant, the CML…

A: Security market line (SML) or Capital market line (CML): The capital market line appears the…

Q: the strengths o

A: Strengths of  scientific approach  Researchers employing survey methods to collect data enjoy a…

Q: What key assumption underlies the pure expectations theory?

A: Pure expectations theory in finance refers to the fact that the forward rates are nothing but the…

Q: What are the CVP assumptions?

A:

Q: Explain Expectations Theory?

A: Expectations theory attempts to predict what short-term interest rates will be in the future based…

Q: This is is used to check the effect on the recommendations of a model if the estimates turn out to…

A: solution: concept In a what if analysis we try to answer the question of what if What if the value…

Q: What is the purpose of NPV analysis? Be sure to discuss the concepts of risk and return in your

A: Net present value NPV is used quite extensively in capital budgeting decisions whether to accept or…

Q: Differentiate between applied and actual FOH with two examples, support your response with…

A: Overhead are those expenses which are not directly consumed to make a product or render service but…

Q: Does the MM theory appear to be correct according to either empirical research or observations…

A: The question is based on the concept of Modigliani Miller (MM) approach of capital structure and…

Q: What is the iceberg effect? How can CASE tools help to minimize this phenomenon?

A: The Iceberg Principle or Iceberg Theory is a hypothesis that proposes that we can't see or recognize…

Q: What do you mean by null hypothesis, how to test the hypothesis give the best examples?

A: In common parlance, hypothesis is an assumption regarding anything and that assumption is based on…

Q: When we work with the breakeven point, how important is it to understand what a decision variable…

A: The question is related to Marginal Costing. The break-even point is that level of sales at which…

Q: What is Roll’s critique of CAPM tests?

A: Capital asset pricing model is a model that is used to estimate the expected return on an asset. In…

Q: Which of the following is a correct statement?

A: When a sole property dies during the financial year leaving the estate that is known as Deceased…

Q: Why is Scenario Analysis useful?

A: Scenario Analysis is a process where various (more than one) input changes are made at the same time…

Q: Explain Prepayment Assumptions?

A: Prepayment model : In simple words, A prepayment model is employed in banking to forecast the amount…

Q: Why is it more accurate to describe the subject matter of this chapter as CVP analysis rather than…

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: Provide one example of a calculation of risk and discuss its significance.

A: Risk is a chance that the actual gain or outcome from the investment will differ from the expected…