The Risk Premium of a Security Is Determined by Its

question 4

Multiple Choice

The risk premium of a security is determined by its ________ risk and does not depend on its ________ risk.

• A)systematic,undiversifiable
• B)systematic,unsystematic
• C)diversifiable,diversifiable
• D)all of the above

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Definitions:

Stream of Consciousness

A literary style or technique that seeks to depict the myriad thoughts and feelings which pass through the mind.

Observable Behavior

Actions or reactions of an individual that can be directly observed and measured, typically in a scientific or psychological context.

Watson

Refers to John B. Watson, an American psychologist who established the psychological school of behaviorism, emphasizing the importance of observable behaviors and discounting mental activities.

Kohler

Wolfgang Köhler, a psychologist and one of the founders of Gestalt psychology, known for his work on insight learning.