The _____ Tells Us That the Expected Return on a Risky

question 81

Multiple Choice

The _____ tells us that the expected return on a risky asset depends only on that asset's nondiversifiable risk.

• A) Efficient Markets Hypothesis (EMH)
• B) systematic risk principle
• C) Open Markets Theorem
• D) Law of One Price
• E) principle of diversification

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Definitions:

Bankruptcy

A legal process for individuals or entities that are unable to repay their debts, allowing for a reorganization or elimination of debt under the protection of the law.

Enforceable

Capable of being imposed or carried out by legal action or authority; describes a rule, contract, or law that can be legally upheld.

Bargained For

In contract law, referring to an exchange that parties agree upon, which forms the basis for a legally enforceable contract.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.