An Increase in the Risk-Free Rate Causes the SML to Shift

question 40

True/False

An increase in the risk-free rate causes the SML to shift down parallel to the old SML.

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Definitions:

Natural Tendency

An innate or inherent inclination or predisposition towards a particular behavior, action, or thought pattern.

Person-Centered Therapy

A nondirective, humanistic therapy developed by Carl Rogers, in which the therapist creates an accepting climate and shows empathy, freeing clients to be themselves and releasing their natural tendency toward self-actualization.

Insight

The sudden realization of the relationship between elements in a problem situation, which makes the solution apparent.

Cognitive

Pertaining to the mental processes involved in knowledge, understanding, learning, and thinking.