If the Standard CAPM Holds,a Security with a High Variance

question 10

Multiple Choice

If the standard CAPM holds,a security with a high variance of return and a beta of zero should be expected to earn:

• A) a zero rate of return.
• B) the market rate of return.
• C) the risk-free rate of return.
• D) higher rate of return

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Definitions:

Dopamine

A neurotransmitter in the brain associated with pleasure, movement, and the reward system.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli which have qualities of real perception.

Relaxation

A state of being free from tension and anxiety, often pursued through various techniques such as meditation, breathing exercises, or certain recreational activities.

Serotonin

A neurotransmitter involved in various functions, including mood regulation, digestion, and sleep.