The Expected Return-Beta Relationship of the CAPM Is Graphically Represented

question 35

Multiple Choice

The expected return-beta relationship of the CAPM is graphically represented by

• A) the security-market line.
• B) the capital-market line.
• C) the capital-allocation line.
• D) the efficient frontier with a risk-free asset.
• E) the efficient frontier without a risk-free asset.

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Definitions:

Goal Orientation Theory

The view that achievement motivation depends on which of four goal orientations (mastery/approach, mastery/avoidance, performance/avoidance, performance/approach) an individual adopts.

Mastery/Avoidance

Goals oriented towards gaining proficiency in a task versus goals aimed at avoiding incompetence or failure.

Physiological Need

A basic biological requirement for human survival, such as food, water, and sleep, which must be satisfied to maintain health.

Extracellular Thirst

Thirst caused by a reduction in the volume of fluids found outside of the body cells, often due to blood loss or dehydration.