The Theory That Kings and Other Rulers Were Only Accountable

question 4

Multiple Choice

The theory that kings and other rulers were only accountable to God for their actions is also referred to as

• A)civil religion theory.
• B)accountablility theory.
• C)exploitation theory.
• D)divine right theory.

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Definitions:

Nondiversifiable Risk

Risk that cannot be eliminated by investing in many projects or by holding the stocks of many companies.

Diversifiable Risk

Risk that can be eliminated either by investing in many projects or by holding the stocks of many companies.

Expected Return

Expected return is the anticipated profit or loss from an investment, factoring in all possible outcomes weighted by their probabilities.

Asset Beta

A constant that measures the sensitivity of an asset’s return to market movements and, therefore, the asset’s nondiversifiable risk.