In the Results of the Earliest Estimations of the Security

question 5

Multiple Choice

In the results of the earliest estimations of the security market line by Lintner (1965) and by Miller and Scholes (1972) , it was found that the average difference between a stock's return and the risk-free rate was ________ to its nonsystematic risk.

• A)positively related
• B)negatively related
• C)unrelated
• D)related in a nonlinear fashion

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Definitions:

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