The Capital Asset Pricing Model Is Given by R -

question 31

Multiple Choice

The capital asset pricing model is given by R - R_f = α + β(R_M - R_f) + ε, where R_M = expected return on the market, R_f = risk-free market return, and R = expected return on a stock or portfolio of interest. The response variable in this model is ________.

• A) R
• B) R - R_f
• <sub
• C) _RM
• D) _RM - R_f

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Definitions:

Spontaneous Behavior

Actions that occur without being externally prompted, often seen as natural responses to internal or environmental stimuli.

Observer Bias

A form of cognitive bias that occurs when researchers' expectations influence their interpretation of the subjects' behaviors or outcomes of the study.

Biological Differences

Variations among organisms at the biological level, including genetic, hormonal, and physiological differences.

Sex

broadly refers to the biological characteristics that define humans as female or male, and can also relate to sexual activity.