In Terms of the Risk/return Relationship in the APT

question 67

Multiple Choice

In terms of the risk/return relationship in the APT,

• A) only factor risk commands a risk premium in market equilibrium.
• B) only systematic risk is related to expected returns.
• C) only nonsystematic risk is related to expected returns.
• D) only factor risk commands a risk premium in market equilibrium, and only systematic risk is related to expected returns.
• E) only factor risk commands a risk premium in market equilibrium, and only nonsystematic risk is related to expected returns.

Distinguish between binomial and non-binomial experimental conditions.

Calculate the mean, variance, and standard deviation of a binomially distributed variable.

Apply the binomial probability formula to calculate probabilities of specific outcomes.

Understand the effect of varying the number of trials and success probability on the shape of binomial distribution.

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Definitions:

Respiratory System

The organ system that facilitates breathing, including the lungs, airways, and muscles, enabling the exchange of oxygen and carbon dioxide.

Tuberculosis

A contagious bacterial infection caused by Mycobacterium tuberculosis, primarily affecting the lungs but can spread to other organs.

COPD

Chronic Obstructive Pulmonary Disease, a lung condition characterized by persistent respiratory symptoms and airflow limitation.

Asthma

Condition in which bronchioles constrict and cause difficulty in breathing.