Which of the Following Statements Is Correct

question 77

Multiple Choice

Which of the following statements is correct?

• A)If the risk-free rate rises, then the market risk premium will also rise.
• B)If a company's beta is halved, then its required return will also be halved.
• C)If a company's beta doubles, then its required return will also double.
• D)The slope of the security market line is equal to the market risk premium, (r_M - r_RF).

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Definitions:

Sensitive Period

A specific time frame in development when the ability to acquire certain types of skills or knowledge is enhanced.

Egocentrism

A developmental stage where an individual is unable to differentiate between their own perspective and that of others, often seen in children.

Concrete Operational Thinking

A stage of cognitive development in children, as identified by Piaget, where individuals can think logically about concrete events and understand the concept of conservation.

Pubertal Growth Spurt

A rapid increase in height and weight during puberty, resulting from accelerated bone growth.