Which One of the Following Statements Is Correct

question 2

Multiple Choice

Which one of the following statements is correct?

• A)The risk premium on a risk-free security is generally considered to be one percent.
• B)The expected rate of return on any security, given multiple states of the economy, must be positive.
• C)There is an inverse relationship between the level of risk and the risk premium given a risky security.
• D)If a risky security is correctly priced, its expected risk premium will be positive.
• E)If a risky security is priced correctly, it will have an expected return equal to the risk-free rate.

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Definitions:

Data Protection Directive

A legal framework focused on the protection of personal data and privacy of individuals within the European Union.

EU

The European Union, a political and economic union of 27 European countries that are located primarily in Europe.

Consumer Privacy

The rights and measures that protect an individual's personal information from being disclosed or misused by third parties.

Social Networks

Online platforms that facilitate the building of social relations among people who share interests, activities, backgrounds, or real-life connections.