You Own Three Securities

question 61

Multiple Choice

You own three securities. Security A has an expected return of 11% as compared to 14% for Security B and 9% for Security C. The expected inflation rate is 4% and the nominal risk-free rate is 5%. Which one of the following statements is correct?

• A)There is no risk premium on Security C.
• B)The risk premium on Security A exceeds that of Security B.
• C)Security B has a risk premium that is 50% greater than Security A's risk premium.
• D)The risk premium on Security C is 5%.
• E)All three securities have the same expected risk premium.

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Infant

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A training method where two different stimuli are paired repeatedly, leading to a response initially triggered by the second stimulus being ultimately triggered by the first stimulus alone.

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involves coming into contact with something or someone, typically conveying emotion or intention through physical contact.