Which One of the Following Should Earn the Most Risk

question 18

Multiple Choice

Which one of the following should earn the most risk premium based on CAPM?

• A)diversified portfolio with returns similar to the overall market
• B)stock with a beta of 1.38
• C)stock with a beta of 0.74
• D)U.S. Treasury bill
• E)portfolio with a beta of 1.01

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Definitions:

Sensory Storage

Refers to the very short-term storage of sensory information, a part of memory that allows individuals to retain impressions of sensory information after the original stimulus has ceased.

Long-term Storage

The aspect of memory where information is kept for extended periods, potentially for a lifetime.

Neurons Change

The process by which neurons alter their structure, function, or connections, often in response to learning or experience.

Filter Theory

A perspective in social psychology suggesting that social and cognitive processes filter the stimuli we pay attention to, impacting our perception and interactions.