Both the CAPM and APT Suggest That an Asset Should

question 38

Multiple Choice

Both the CAPM and APT suggest that an asset should be priced so that it has a higher expected return

• A)when it has a greater systematic risk.
• B)when it has a greater risk in isolation.
• C)when it has a lower systematic risk.
• D)when it has a lower systematic risk and a lower risk in isolation.

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Definitions:

Personality Assessment

The evaluation of an individual's character or psychological makeup to understand or predict personal characteristics or behavior.

More Assertive

Pertains to being confident and direct in dealing with others, often in communication or behavior, without being aggressive.

Gender Differences

Variations in characteristics, behaviors, physical development, and roles attributed or assigned to males and females.

Weak Situation

A setting in which clear expectations for behavior are lacking, allowing greater expression of personality differences.