Given the Results of the Early Studies by Lintner (1965)

question 39

Multiple Choice

Given the results of the early studies by Lintner (1965) and Miller and Scholes (1972) , one would conclude that

• A) high beta stocks tend to outperform the predictions of the CAPM.
• B) low beta stocks tend to outperform the predictions of the CAPM.
• C) there is no relationship between beta and the predictions of the CAPM.
• D) high beta stocks and low beta stocks tend to outperform the predictions of the CAPM.
• E) None of the options are correct.

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Definitions:

Congruent

Being in harmony or agreement; when things align or match in a consistent way.

Psychology Career

A professional path that involves studying mental functions and behaviors, and often includes roles such as research, counseling, and clinical practice.

Thorndike

An American psychologist who developed the law of effect, which states that behaviors followed by pleasing consequences tend to be repeated, while those followed by unpleasant consequences are less likely to be repeated.

Milgram

Refers to Stanley Milgram, a psychologist known for his experiments on obedience, demonstrating people's willingness to follow authority figures' orders, even to the point of harming others.