The market risk premium is computed

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Reference no: EM131861655

1. The market risk premium is computed by:

a) adding the risk-free rate of return to the inflation rate.

b) adding the risk-free rate of return to the market rate of return.

c) subtracting the risk-free rate of return from the inflation rate.

d) subtracting the risk-free rate of return from the market rate of return.

e) multiplying the risk-free rate of return by a beta of one.

2. Which of the following statements about adjustments is not correct?

a) When making an adjustment to recognize supplies used in a period, total assets will not change.

b) Deferral adjustments are used to update amounts that have been previously deferred on the balance sheet.

c) Depreciation is an example of a deferral adjustment.

d) Accrued wages are wages owed, but not yet paid, to employees; the accrued wages will need to be recorded with an adjusting entry that increases expenses.

Reference no: EM131861655

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