Which One of the Following Statements Is Correct

question 81

Multiple Choice

Which one of the following statements is correct?

• A)The risk premium on a risk-free security is generally considered to be 1 percent.
• B)The expected rate of return on any security, given multiple states of the economy, must be positive.
• C)There is an inverse relationship between the level of risk and the risk premium given a risky security.
• D)If a risky security is correctly priced, its expected risk premium will be positive.
• E)If a risky security is priced correctly, it will have an expected return equal to the risk-free rate.

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Definitions:

Alternative Design's Effect

Refers to the impact that choosing a different design might have on the results or outcomes of a project or product.

Boat Designers

Professionals who specialize in creating the aesthetic and functional specifications of boats, considering factors such as safety, efficiency, and usability.

Design Defect

A flaw in the design of a product that makes it unsafe for its intended use.

Ordinary Consumer

The average person who purchases goods or services for personal use, not for manufacture or resale.