Refer to the Graph

question 74

Multiple Choice

Refer to the graph. Consider an asset represented by point F. The process of arbitrage will draw investors to the higher rates of return,

• A) increasing both price and the average expected rate of return.
• B) changing the intercept of the Security Market Line until it intersects point F.
• C) changing the slope of the Security Market Line until it intersects point F.
• D) increasing the asset's price and lowering the average expected rate of return.

---

Definitions:

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one’s preconceptions, leading to statistical errors.

Public Opinion Poll

A method used to gauge public opinion by asking a random sample of people questions on various topics.

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Representativeness Heuristic

A cognitive shortcut that involves judging the probability of an event by its similarity to a prototype or an example.