Which of the Following Statements Is CORRECT

question 131

Multiple Choice

Which of the following statements is CORRECT?

• A) Beta is measured by the slope of the security market line.
• B) If the risk-free rate rises, then the market risk premium must also rise.
• C) If a company's beta is halved, then its required return will also be halved.
• D) If a company's beta doubles, then its required return will also double.
• E) The slope of the security market line is equal to the market risk premium, (rM − rRF).

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Definitions:

Negative Assumptions

Cognitive biases or beliefs that lead an individual to view situations or outcomes more pessimistically, potentially contributing to anxiety and depression.

Cognitive Dissonance

The unease experienced mentally by an individual who possesses two or more contradictory beliefs, ideas, or values at the same time.

Smoker

An individual who inhales the smoke of burning tobacco products, such as cigarettes or cigars.

Televised Violence

Televised violence refers to the portrayal of violent acts in television programming, which has been a point of concern regarding its potential influence on real-world aggression and desensitization to violence.