If You Plotted the Returns of a Given Stock Against

question 101

True/False

If you plotted the returns of a given stock against those of the market, and if you found that the slope of the regression line was NEGATIVE, the CAPM would indicate that the required rate of return on the stock should be greater than the risk-free rate for a well-diversified investor, assuming that the observed relationship is expected to continue into the future.

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Definitions:

Activating Event

An initial occurrence or situation that triggers a psychological or emotional response.

Antecedent

An event or environment condition that precedes and triggers a behavior or response.

Ellis's ABC

A cognitive-behavioral therapy model developed by Albert Ellis, focusing on the relationship between beliefs (B), consequences (C), and activating events (A).

Activating Events

Situations or experiences that trigger a psychological response, often discussed in cognitive-behavioral therapy to address emotional reactions.