Use the Following Information to Answer the Question(s) Below

question 19

Multiple Choice

Use the following information to answer the question(s) below.

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:



-Which of the following stocks represent selling opportunities?
1.Taggart Transcontinental
2.Rearden Metal
3.Wyatt Oil
4.Nielson Motors

• A)1 only
• B)1 and 2 only
• C)2 and 3 only
• D)2 and 4 only

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Definitions:

High-Frequency Behavior

Behavior that occurs at a high rate or with great frequency, often requiring intervention or modification in behavioral studies.

Low-Frequency Behavior

Actions or responses that occur relatively infrequently within a given dataset or behavioral assessment.

Disequilibrium Principle

The Disequilibrium Principle refers to the concept in cognitive development where learning occurs as individuals adjust to new information, leading to a state of balance between existing knowledge and new experiences.

Secondary Reinforcer

A stimulus that has acquired reinforcing properties through associations with primary reinforcers.