To Conclude That Smoking Causes Lung Cancer, You Need to Establish

question 56

Multiple Choice

To conclude that smoking causes lung cancer, you need to establish that

• A) there is a significant relation between smoking and lung cancer.
• B) lung cancer always follows smoking and does not appear before smoking.
• C) there are no other significant variables that influence both lung disease and cancer.
• D) All of these are true.

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Definitions:

Risk-Free Portfolio

An investment portfolio consisting of assets that have no risk of financial loss, typically associated with government bonds.

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio in comparison to the market as a whole, indicating how sensitive the portfolio is to market movements.

Security Market Line

A line that represents the relationship between the risk of an investment and its expected return, used in capital asset pricing model (CAPM) to determine risk-adjusted returns.

Unsystematic Risk

The risk associated with a specific company or industry, also known as "diversifiable risk" or "idiosyncratic risk."