The capital asset pricing model suggests that the required return on a firm's stock is a positive function of:
a. the risk-free rate of interest.
b. the market rate of return

Which of the following does not represent a major classification of expenses identified by FASB concept statement no. 5?

A) product costs B) functional costs C) period costs D) allocable costs

An internal auditor for a unversity performed an assurance engagement to review the university bookstore's cash function. Which of the following actions will be deemed lacking in due professional care?

a) a flowchart of the entire cash function was developed, but only a sample of transactions were tested b) because of a highly developed system of internal control over the cash function, the final engagement communication assures senior management that no irregularities exist c) the final engagement communication included a well-supported recommendation for the reduction in staff, although it was known that such a reduction would adversely affect morale d) organizational records were reviewed to determine whether all employees who handled cash receipts and disbursements were bonded