An Animal That Is Apparently Aware of Its Circumstances and Uses

question 31

Multiple Choice

An animal that is apparently aware of its circumstances and uses reasoning to achieve a goal is said to have ____.

• A) conditioning
• B) habituation
• C) cognition
• D) imprinting
• E) learning

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Definitions:

Portfolio Beta

A measure of the volatility of a portfolio relative to the overall market; the aggregate beta of all the investments in the portfolio.

Systematic Risk

The inherent risk associated with the entire market or market segment, undiversifiable through portfolio diversification.

Unsystematic Risk

The risk associated with a specific company or industry, which can be mitigated through diversification of an investment portfolio.

Security Market Line

A representation in the capital asset pricing model (CAPM) showing the relationship between expected return and systematic risk.