If the Price of Money (E

question 119

True/False

If the price of money (e.g., interest rates and equity capital costs) increases due to an increase in anticipated inflation, the risk-free rate will also increase. If there is no change in investors' risk aversion, then the market risk premium (rM - rRF) will remain constant. Also, if there is no change in stocks' betas, then the required rate of return on each stock as measured by the CAPM will increase by the same amount as the increase in expected inflation.

Recognize the impact of emotions and modifications over time on memory recall.

Explain the concepts of iconic and echoic memories and their durations.

Understand the role of preconceived ideas in processing and encoding new information.

Explain the phenomenon of long-term potentiation and its relevance to learning and memory.