Which of the Following Is True

question 314

Multiple Choice

Which of the following is true?

• A) Risky assets on average do not earn a risk premium.
• B) There is a reward for bearing risk, on average.
• C) On average, the greater the risk, the lower the reward.
• D) When comparing the common stock of two firms, the riskier one will have the lower price.
• E) If a market is not efficient, then all assets in that market will have the same reward to risk ratio.

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Definitions:

Nonliability

A condition or status where an individual or entity is not held legally responsible for certain actions or outcomes.

Affirmative Action

Affirmative action refers to policies that take race, color, religion, sex, or national origin into consideration in order to benefit an underrepresented group in areas of employment, education, and business.

Moral Blame

Attribution of ethical responsibility or wrongdoing to an individual or group.

Preventing Future Harm

Strategies or actions taken to avoid potential injuries or damages before they occur.