Stock a Has a Beta of 0

question 58

Multiple Choice

Stock A has a beta of 0.8 and Stock B has a beta of 1.2.50% of Portfolio P is invested in Stock A and 50% is invested in Stock B.If the market risk premium (r_M − r_RF) were to increase but the risk-free rate (r_RF) remained constant, which of the following would occur?

• A) The required return would decrease by the same amount for both Stock A and Stock B.
• B) The required return would increase for Stock A but decrease for Stock B.
• C) The required return on Portfolio P would remain unchanged.
• D) The required return would increase for Stock B but decrease for Stock A.
• E) The required return would increase for both stocks but the increase would be greater for Stock B than for Stock A.

Understand the concept of ecological mimicry and its types.

Explain the significance of keystone species beyond their abundance.

Recognize various ecological effects such as the edge effect and the role of dominant and keystone species in ecosystems.

Understand adaptations in species for defense against predators and the significance of coloration.

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Definitions:

Sunk Cost Effect

The phenomenon where a person is more likely to continue an endeavor once an investment in money, effort, or time has been made.

Spearman's "G" Factor

The concept proposed by Charles Spearman that suggests a single, general intelligence factor underlies all cognitive abilities.

Intelligence

The ability to learn from experience, adapt to new situations, understand and handle abstract concepts, and use knowledge to manipulate one's environment.

Crystallized Intelligence

The capacity to apply acquired knowledge and experience efficiently.