In the Results of the Earliest Estimations of the Security

question 6

Multiple Choice

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

• A)positively related
• B)negatively related
• C)unrelated
• D)inversely related
• E)not proportional

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Definitions:

Open-Ended Questions

Questions that cannot be answered with a simple "yes" or "no," encouraging detailed and descriptive responses.

Open-Ended Question

A type of question that does not have a fixed set of responses, allowing for a wide range of answers and fostering more in-depth discussion.

Fact-Finding Question

A question asked with the intent of gathering factual information or specifics about a topic, often used in research or investigative contexts.

Inductive Reasoning

A method of reasoning in which specific observations or experiences are used to make broad generalizations.