If Treasury Bills Are Yielding 10% at a Time When

question 101

Multiple Choice

If Treasury bills are yielding 10% at a time when the market risk premium is 6%, then the:

• A)Market portfolio should yield 4%
• B)Market portfolio should yield 6%
• C)Market portfolio should yield 16%
• D)Market portfolio should yield 22%

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Definitions:

Group Norms

The beliefs or behaviors that a group of people accepts as normal.

Normative Conformity

The tendency to behave in ways that are in line with the group's norms or expectations in order to fit in or gain approval.

Devil's Advocate

Someone who adopts a position they do not necessarily agree with, for the sake of argument or to explore the thought process.

Asch's Line-Judging

Definition: An experiment conducted by Solomon Asch that demonstrated the power of conformity in groups, where individuals often agree with clearly incorrect majority opinions.