In the Results of the Earliest Estimations of the Security

question 20

Multiple Choice

In the results of the earliest estimations of the security market line by Lintner (1965) and by Miller and Scholes (1972) ,it was found that the average difference between a stock's return and the risk-free rate was ________ to its nonsystematic risk.

• A)positively related
• B)negatively related
• C)unrelated
• D)related in a nonlinear fashion
• E)none of the above

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Definitions:

Colleagues

Individuals with whom one works, especially within a profession or within a collaborative environment.

Subordinates

Individuals who are lower in rank or position and are under the direction of a higher authority.

Upward Relationship

The dynamic between lower-level employees and their supervisors or managers, emphasizing communication and interaction flowing from subordinates to higher-ups.

Autocratic Decision Making

A decision-making style where the leader makes decisions unilaterally without consulting subordinates, often associated with centralized control.