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:

Socially Organized Barrier

Structures or systems within society that impede individuals or groups from achieving equal status or access to resources.

Mental Condition

A broad term referring to any disorder, illness, or irregular pattern of thought, emotion, or behavior that affects the mind.

Disability

A physical or mental condition that limits a person's movements, senses, or activities.

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The process by which a company reduces its workforce, often to cut costs or improve efficiency, affecting employees' job stability.