A Disadvantage of Cross-Sectional Research Is

question 17

Multiple Choice

A disadvantage of cross-sectional research is

• A)the variable under investigation is assessed all at the same time.
• B)it is not very effective.
• C)it gives no information about how individuals change over time.
• D)it is time-consuming and expensive to conduct.

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Definitions:

Capital Asset Pricing

A model that describes the relationship between the expected return of an investment and the risk, or beta, relative to the market.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification.

Security Market Line

A representation in financial markets of the relationship between risk and expected return, used in the Capital Asset Pricing Model.

Overpriced Security

A security trading at a price believed to be higher than its theoretical value or intrinsic worth.