When the Market Portfolio Is Not Efficient,theory Predicts That Stocks

question 55

Multiple Choice

When the market portfolio is not efficient,theory predicts that stocks with ________ market capitalizations or ________ book-to-market ratios will have ________ alphas.

• A) high; low; positive
• B) low; high; negative
• C) low; high; positive
• D) high; high; negative

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Definitions:

Non-associative Learning

A form of learning characterized by a change in response to a stimulus due to repeated exposure, without the need for association with a different stimulus.

Observational Learning

The acquisition or modification of a behavior after exposure to at least one performance of that behavior.

Operant Conditioning

A training technique that adjusts the potency of a conduct via positive reinforcement or disciplinary measures.

Classical Conditioning

A type of learned response in which a neutral object comes to elicit a response when it is associated with a stimulus that already produces a response.