For the CAPM That Examines Illiquidity Premiums, If There Is

question 74

Multiple Choice

For the CAPM that examines illiquidity premiums, if there is correlation among assets due to common systematic risk factors, the illiquidity premium on asset i is a function of

• A) the market's volatility.
• B) asset i's volatility.
• C) the trading costs of security i.
• D) the risk-free rate.
• E) the money supply.

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Definitions:

Unnecessary Words

Words in speech or writing that do not add significant meaning or value to the message being conveyed.

Sensorimotor Stage

The first stage in Piaget's theory of cognitive development, where infants learn about the world through their senses and actions.

Cognitive Development

Refers to the progression of thinking, problem solving, and decision-making abilities from childhood through adolescence to adulthood.

Piaget

Jean Piaget was a Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development that describes how children's intellectual abilities evolve as they grow.