Which Carries Messages to the Brain

question 89

Multiple Choice

Which carries messages to the brain?

• A) The auditory nerve
• B) The semicircular canals
• C) The cochlea
• D) The eustachian tube

Recognize the distinction between APT and the Capital Asset Pricing Model (CAPM).

Understand the role of the risk-free rate in determining the expected returns according to APT.

Appreciate the importance of factor models in explaining security returns.

Determine the risk premiums on factor portfolios according to multifactor models.

---

Definitions:

Statistical Analysis

The process of collecting, reviewing, and interpreting data to discover patterns and significance in the collected information.

Positive Reinforcement

A concept in behavioral psychology where the introduction of a desirable or pleasant stimulus after a behavior increases the likelihood of that behavior occurring in the future.

Negative Reinforcement

A behavior modification technique where the removal of an undesirable or unpleasant stimulus strengthens a desired behavior.

Operant Conditioning

A learning process in behavioral psychology where the strength of a behavior is modified by reinforcement or punishment.