The Risk Premium for Common Stocks

question 56

Multiple Choice

The risk premium for common stocks

• A) cannot be zero, for investors would be unwilling to invest in common stocks.
• B) must always be positive, in theory.
• C) is negative, as common stocks are risky.
• D) cannot be zero, for investors would be unwilling to invest in common stocks and must always be positive, in theory.
• E) cannot be zero, for investors would be unwilling to invest in common stocks and is negative, as common stocks are risky.

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Definitions:

Social Rules

The guidelines for behavior that are considered acceptable and expected within a society or group.

Being Male or Female

Refers to the biological and physiological characteristics that define humans as male or female.

Puberty

The age at which a person becomes capable of sexual reproduction.

Sexual Reproduction

A biological process where two organisms contribute genetic material to produce offspring, combining traits from both parents.