Which One of the Following Must Be Equal for Two

question 7

Multiple Choice

Which one of the following must be equal for two individual securities with differing betas if those securities are correctly priced according to the capital asset pricing model?

• A)standard deviation
• B)rate of return
• C)beta
• D)risk premium
• E)reward-to-risk ratio

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Definitions:

Structural Unemployment

Unemployment caused by changes in the industrial makeup of an economy or technological innovations that render certain job skills obsolete.

Equilibrium Wage

The pay rate where the amount of work offered matches the amount of work required.

Union Membership

The state of being a member of a labor union, which is an organization that represents the collective interests of workers.

United States

A country located in North America, consisting of 50 states, a federal district, five major self-governing territories, and various possessions.