A Researcher Asks Couples in Their 70s to Think Back

question 65

Multiple Choice

A researcher asks couples in their 70s to think back on their marriages and say which period had been the happiest in their married lives. Which period, on average, are these adults likely to say was the happiest?

• A) when they were newlyweds, before the first child was born
• B) when they had young children
• C) when all the children left home
• D) both a and c

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Definitions:

SML

The Security Market Line, a graphical representation of the Capital Asset Pricing Model showing the relationship between the expected return of a security and its beta (systematic risk).

Required Returns

The minimum expected return on an investment, determined by the investor's risk tolerance and the investment's risk level.

Diversifiable Risks

Risks that can be reduced or eliminated through diversification in an investment portfolio.

Beta

A measure of a security's volatility in relation to the overall market; used in the capital asset pricing model to determine the expected return of an asset.