Which One of the Following Is a Correct Statement Concerning

question 44

Multiple Choice

Which one of the following is a correct statement concerning risk premium?

• A) The greater the volatility of returns, the greater the risk premium.
• B) The lower the volatility of returns, the greater the risk premium.
• C) The lower the average rate of return, the greater the risk premium.
• D) The risk premium is not correlated to the average rate of return.
• E) The risk premium is not affected by the volatility of returns.

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Definitions:

Arousal

A state of physiological and psychological activation or alertness, which can be triggered by stimuli that are perceived as exciting or challenging.

Parasympathetic

Refers to the part of the autonomic nervous system responsible for relaxation, conservation of energy, and slowing down bodily functions.

Sympathetic

Pertaining to the sympathetic nervous system, part of the autonomic nervous system responsible for activating the body's fight-or-flight response.

Somatic

Relating to or affecting the body, distinct from the mind or emotions.