Given the Results of the Early Studies by Lintner (1965)and

question 12

Multiple Choice

Given the results of the early studies by Lintner (1965) and Miller and Scholes (1972) ,one would conclude that

• A) high beta stocks tend to outperform the predictions of the CAPM
• B) low beta stocks tend to outperform the predictions of the CAPM
• C) there is no relationship between beta and the predictions of the CAPM
• D) a and b
• E) none of these

---

Definitions:

Gut Feelings

Intuitive judgments and responses that are not the result of conscious reasoning.

Leipzig, Germany

A city in the federal state of Saxony, Germany, known for its rich cultural heritage, including music, art, and its role in the history of philosophy and psychology.

Phrenology

A now-discredited theory that suggested the shape and size of the human skull could determine personality traits and mental abilities.

Pseudoscience

Claims, beliefs, or practices presented as scientific but lacking empirical evidence or scientific method.