The Risk Premium for an Individual Security Is Equal to The

question 16

Multiple Choice

The risk premium for an individual security is equal to the:

• A)beta times the market return.
• B)difference between the market return and the risk free rate times the security's beta.
• C)weighted average of the individual security betas in a portfolio.
• D)the security's variance divided by the variance of the market.

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Definitions:

Material Benefits

Material benefits are tangible resources or goods that individuals gain, which can contribute to their survival or reproductive success.

Direct Benefits

Advantages received immediately by individuals from a particular behavior, increasing their survival or reproduction.

Material Benefits

Tangible advantages or goods obtained from actions, decisions, or relationships, such as food, shelter, or items of economic value.

Assortative Mating

A mating pattern where individuals with similar phenotypes or genotypes are more likely to mate with each other than by chance.