Changes in Risk Aversion, and Therefore Shifts in the SML

question 61

True/False

Changes in risk aversion, and therefore shifts in the SML, result from changing tastes and preferences of investors, which generally result from various economic, political, and social events.

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Definitions:

Instrumental Values

Values that are viewed as a means to an end, guiding individuals towards achieving their life goals.

Locus of Control

A psychological concept that describes an individual's belief about the degree to which they can control events affecting them.

Dogmatism

The tendency to lay down principles as undeniably true, without consideration of evidence or the opinions of others.

Sexual Orientation

Refers to an individual's patterns of emotional, romantic, or sexual attraction to people of the same gender, opposite gender, both genders, or no gender.