What is capital asset pricing model

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Reference no: EM131984458

1. What is Capital Asset Pricing Model? How would an average investor use the model to decide which stocks to buy or sell?

2. Joe’s salary is $200,000 and he receives a group term life insurance policy equal to two times his salary. Presuming the plan is non-discriminatory, how much of the face-value of the insurance policy, if any, is subject to inclusion in his W-2 income?

a. $0.

b. $50,000.

c. $150,000.

d. $350,000.

3. Erin is single and a mom of a 4 year old child. Erin has net taxable income and salary of $45,000 making her a 25% marginal income tax payer. She spends $3,000 on child care expenses. Should Erin take the child care credit or put $2,000 in the FSA?

a. Child care credit by $100.

b. FSA by $53.

c. FSA by $300.

d. They are the same.

Reference no: EM131984458

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