During Which Step of the International Communications Process Does the Receiver

question 96

Multiple Choice

During which step of the international communications process does the receiver of the message interpret symbolism transmitted from an information source?

• A) selecting a message
• B) encoding
• C) selecting a message channel
• D) decoding
• E) identifying the sources of noise

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Definitions:

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, used in finance to price risky securities.

William Sharpe

An economist who created the Sharpe Ratio, a measure to calculate risk-adjusted return.

SML (Security Market Line)

A line in the Capital Asset Pricing Model that shows the relationship between the expected return of a security and its risk.

Risk Averse

A tendency to prefer certainty over uncertain outcomes to minimize exposure to financial loss.