The Difference Between the Return on the Market Portfolio of Assets

question 37

True/False

The difference between the return on the market portfolio of assets and the risk-free rate of return represents the premium the investor must receive for taking the average amount of risk associated with holding the market portfolio of assets.

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Definitions:

Syllogism

A form of reasoning in which a conclusion is drawn from two given or assumed propositions (premises), each sharing a common or middle term not present in the conclusion.

Reasoning

The mental process of generating conclusions, judgments, or inferences based on premises or evidence.

Plausible

Appearing reasonable or probable; believable or credible.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.