Exhibit 1-3 Refer to Exhibit 1-3

question 65

Multiple Choice

Exhibit 1-3 Refer to Exhibit 1-3.  Based on the data provided in this table,  if these data were plotted in a two-variable diagram the result would be a ______________ sloping _____________.

• A)downward; (nonlinear)curve
• B)downward; (straight)line
• C)upward; (nonlinear)curve
• D)upward; (straight)line

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Definitions:

One-Factor APT

A financial model that describes the relationship between a security's returns and a single factor affecting all securities, used to predict performance.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds of a stable country.

Diversified Portfolios

A strategy that mixes a wide variety of investments within a portfolio to minimize risks.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by GDP.