In the Long Run, the Rate of Return on a Capital

question 103

True/False

In the long run, the rate of return on a capital investment is, on average, directly related to its risk.

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Definitions:

Equity Theory

A theory suggesting that people feel more satisfied in relationships where perceived input and output are deemed to be equal among parties involved.

Sense of Fairness

The inherent human perception and expectation of equitable treatment and justice in interactions and distributions within society.

Social Exchange Model

A model which takes an economic perspective and assumes that people approach relationships with an underlying motivation of self-interest.

Comparison Level

The expectation of how rewarding a relationship should be.