Which of the Following Statements Is CORRECTσ

question 49

Multiple Choice

Which of the following statements is CORRECTσ

• A) the slope of the security market line is beta.
• B) any stock with a negative beta must in theory have a negative required rate of return, provided rrf is positive.
• C) if a stock's beta doubles, its required rate of return must also double.
• D) if a stock's returns are negatively correlated with returns on most other stocks, the stock's beta will be negative.
• E) if a stock has a beta of to 1.0, its required rate of return will be unaffected by changes in the market risk premium.

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Definitions:

Implicit Cultural Conventions

Unspoken, widely understood rules and norms within a society that influence behavior and perceptions.

Norms

Shared expectations or rules within a society or group that guide and constrain behavior.

Stanley Milgram

Stanley Milgram was a psychologist best known for his controversial experiment on obedience, demonstrating that people are willing to obey authority figures even when it involves harming others.

Obedience Study

A series of experiments conducted by Stanley Milgram, demonstrating the extent to which individuals would follow orders from an authority figure, even when they believed they were causing harm.