The Capital Asset Pricing Model Asserts That the Expected Return

question 89

Multiple Choice

The Capital Asset Pricing Model asserts that the expected return ________.

• A) is equal to the risk-free rate plus a risk premium for unsystematic risk
• B) is equal to the risk-free rate plus a risk premium for systematic risk
• C) is equal to the risk premium plus a risk-free rate for systematic risk
• D) is equal to the risk premium plus a risk-free rate for unsystematic risk

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.