According to the Arbitrage Pricing Theory, the Return

question 33

Multiple Choice

According to the arbitrage pricing theory, the return
On a stock

• A) is not related to the expected return on the stock
• B) depends on the stock's responsiveness to unexpected changes
• C) is reduced through the construction of diversified portfolios
• D) equals the market return if the expected rate of inflation is realized

---

Definitions:

Autonomous Morality

A stage of moral development where individuals start to understand that moral principles may vary based on context and are not just based on external authority figures or rules.

Moral Development

refers to the process through which individuals develop an understanding of values, ethics, and morality, progressing through various stages of moral reasoning throughout their life.

Immanent Justice

Immanent Justice is a cognitive bias, particularly in children, where it is believed that moral behavior is always rewarded and immoral behavior is always punished, naturally or supernaturally.

Moral Development

The growth of an individual's understanding of the principles of right and wrong and the application of this understanding to behavior.