According to the Discussion of Categories, the Basic Level of Reference

question 34

Multiple Choice

According to the discussion of categories, the basic level of reference has special status. This means that

• A) the basic level is more likely than other levels to show family resemblance.
• B) basic-level names are used more often and they are more informative than the superordinate-level names.
• C) the basic level is the most general label that can be supplied.
• D) basic-level names are prototypes, whereas superordinate- and subordinate-level names are not.

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Definitions:

Risk-Free Return

The theoretical return on an investment with zero risk, typically associated with government bonds.

Jensen's Measure

A performance evaluation tool that measures the excess return of a portfolio above the expected return, accounting for risk.

Risk-Free Return

The theoretical return on an investment with zero risk, typically represented by government securities like Treasury bills.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher than market volatility.