Which of the Following Is True

question 2

Multiple Choice

Which of the following is true?

• A) Risky assets on average do not earn a risk premium.
• B) There is a reward for bearing risk, on average.
• C) On average, the greater the risk, the lower the reward.
• D) When comparing the common stock of two firms, the riskier one will have the lower price.
• E) If a market is not efficient, then all assets in that market will have the same reward to risk ratio.

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Definitions:

Business Letter

A formal document for communication between companies, or between a company and its clients, employees, or stakeholders.

Recipient

An individual or entity that receives something from another.

Typist's Initials

The initials added to a document to indicate the person who has typed it, usually for attribution or record-keeping purposes.

Business Letter

A formal document commonly used in corporate or professional settings to communicate between companies, within an organization, or between a company and its clients, vendors, or stakeholders.