If the Rate of Return on the Stock Market Is

question 114

Multiple Choice

If the rate of return on the stock market is r_m and the rate of return on a risk-free asset is r_f, then:

• A) r_m - r_f measures the risk, all of it nondiversifiable, one has to accept in the stock market.
• B) r_m - r_f measures the risk, all of it diversifiable, one has to accept in the stock market.
• C) r_m + r_f measures the risk, all of it nondiversifiable, one has to accept in the stock market.
• D) r_m + r_f measures the risk, all of it diversifiable, one has to accept in the stock market.
• E) r_m + r_f measures the stock market's total risk.

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Definitions:

Mainstream U.S. Culture

The dominant set of norms, behaviors, beliefs, and values practiced and shared by the majority of people in the United States.

Death

The termination of all vital processes that support a living being, signifying the conclusion of its existence.

Dying

The process of approaching death or the cessation of life.

Personal Body Weight

An individual's mass or weight, which can affect health, self-perception, and social interactions.