The Risk Premium of a Security Is Determined by Its

question 71

Multiple Choice

The risk premium of a security is determined by its ________ risk and does not depend on its ________ risk.

• A)systematic,undiversifiable
• B)systematic,unsystematic
• C)diversifiable,diversifiable
• D)diversifiable,unsystematic
• E)unsystematic,diversifiable

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Definitions:

RUPA

An acronym for the Revised Uniform Partnership Act, which is a statutory law that governs the formation, operation, and dissolution of partnerships in the United States.

Continuity of Existence

A characteristic of certain business entities that ensures their existence persists regardless of changes in ownership or membership.

Mining Partnership

A specialized form of association where two or more persons collaborate in the development and operation of a mine, sharing profits and losses proportionally to their contributions.

Mineral Interest

The legal share or entitlement to profits from minerals extracted from the ground, typically pertaining to property rights in the context of real estate.