The Expected Impact of Unanticipated Macroeconomic Events on a Security's

question 10

Multiple Choice

The expected impact of unanticipated macroeconomic events on a security's return during the period is

• A) included in the security's expected return.
• B) zero.
• C) equal to the risk-free rate.
• D) proportional to the firm's beta.
• E) infinite.

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Definitions:

Rubik's Cube

A 3D combination puzzle invented by Ernő Rubik in 1974, consisting of a cube with each of its six faces covered by nine stickers, each of one of six solid colors.

Law of Effect

A principle stating that behaviors followed by satisfying consequences are more likely to be repeated, while those followed by unsatisfying consequences are less likely to be repeated.

Reinforcement

In behavioral psychology, a process by which a behavior is strengthened or increased by its consequences.

Positive Reinforcement

A method of behavior modification that involves rewarding a desired behavior in order to increase the likelihood of it occurring again.