Thalidomide, a Prescription Drug Prescribed for Morning Sickness in the 1960s

question 99

Multiple Choice

Thalidomide, a prescription drug prescribed for morning sickness in the 1960s, was associated with

• A) reduced birth weight.
• B) premature births.
• C) miscarriages.
• D) major deformities in baby's limbs.

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Definitions:

Multifactor APT

A model in financial markets that describes how the returns of an asset can be determined by its exposure to multiple risk factors, as per the Arbitrage Pricing Theory.

Risk Premiums

The additional return expected by an investor for taking on a higher risk compared to a risk-free investment.

No Arbitrage

A principle stating that it is impossible to achieve risk-free profits from inconsistent or mispriced asset prices in efficient markets, as arbitrage opportunities are quickly exploited and corrected.

Risk Premium

The extra return over the risk-free rate that investors require to compensate them for the risk of holding a risky asset.