Which two factors are involved in the risk-free interest rate under the Capital Asset Pricing Model?

Select an answer:

• inflation and current-value of money

• uncertainty and current-value of money

• liquidity and time-value of money

• inflation and time-value of mon

Why is the "equity risk premium" an important concept to understand in finance?

Select an answer:

• It is the measure of how high stocks are priced over the going market rate.

• It is the "premium" or extra return offered to accept risk by investing in stocks.

• It is the risk-free rate minus the average market return on investments.

• It is the "premium" that caps the return on investing in stocks to the risk-free rate.

How does "what you need to buy" relate to finance?

Select an answer:

• It is only part of the long-term decision-making for a company.

• It is part of both long-term and short-term decision-making.

• It dictates how you will handle assets once the company has them.

• It addresses the question of where a company will get money for assets.