Macro Events Only Are Reflected in the Performance of the Market

question 62

Multiple Choice

Macro events only are reflected in the performance of the market portfolio because:

• A) the market portfolio contains only risk-free securities.
• B) only macro events are tracked by economists.
• C) the specific risks have been diversified away.
• D) the firm-specific events would be too numerous to quantify.

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Definitions:

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Contextual Performance

The aspects of an individual’s behavior that contribute to the organizational or social aspects of the job, beyond the technical requirements.

Horns Error

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