In the CAPM

question 20

Multiple Choice

In the CAPM,

• A)larger the value of β for a stock, larger is the unsystematic risk involved in investing in the stock.
• B)larger the value of β for a stock, smaller is the unsystematic risk involved in investing in the stock.
• C)larger the value of β for a stock, larger is the systematic risk involved in investing in the stock.
• D)larger the value of β for a stock, smaller is the systematic risk involved in investing in the stock.

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Definitions:

Fiduciary Duty

The legal obligation of one party to act in the best interest of another party, such as the responsibility of a trustee to safeguard the interests of the beneficiaries.

Compensation

Payment or rewards provided in exchange for services or to cover losses or damages.

Special Agent

A federal or state investigator or detective who conducts criminal investigations and has specific regulatory or enforcement powers.

Duty of Confidentiality

The duty of confidentiality obligates individuals or entities to protect the privacy of personal, sensitive, or proprietary information entrusted to them.