Which of the Following Is Consistent with the CAPM and Efficient

question 12

Multiple Choice

Which of the following is consistent with the CAPM and efficient capital markets?

• A)A security with a beta of 1 has a return last year of 8% when the market has a return of 12%.
• B)Small stocks with a beta of 1.5 tend to have higher returns on average than large stocks with a beta of 1.5.
• C)A security with only diversifiable risk has an expected return that exceeds the risk-free interest rate.
• D)A security with only systematic risk has an expected return that exceeds the risk-free interest rate.

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Definitions:

Logic Continuity

Logic continuity refers to the seamless and uninterrupted logical flow or progression within a system, ensuring that all logical operations are conducted without gaps or errors.

Output PL1

Denotes an output signal or data in the first programming language (PL/I), commonly used in control systems or programming.

Energized

A state in which a component, circuit, or system is supplied with electrical power, causing it to be active or in a working state.

Masked Move Instruction

An instruction in computer programming that selectively modifies bits in a destination operand based on a mask operand.