"Look! Up in the Sky! It's a Bird

question 130

Multiple Choice

"Look! Up in the sky! It's a bird. It's a plane. It's Superman!" If you looked up, would you be conforming?

• A) Yes. You would be looking up because you were told to do so.
• B) No. Conformity requires that you base your behavior on what other people are doing, not being told to do so.
• C) Yes. Conformity means doing what you are told or else.
• D) No. Looking up only means you are curious.

Understand the concept of beta and its significance in measuring a stock's market risk.

Comprehend the Capital Asset Pricing Model (CAPM) and its components.

Calculate the beta of an investment portfolio.

Understand how changes in the risk-free rate affect the Security Market Line (SML).

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Definitions:

Social Identity Theory

A psychological theory that explains intergroup behavior by examining the impact of group membership on individuals' self-concept and behavior towards others.

Self-verification Theory

A psychological theory stating that individuals seek to confirm their existing self-concepts by interpreting information in a way that is consistent with their beliefs about themselves.

Downward Social Comparison

The act of comparing oneself with those who are perceived to be in a worse position, which can lead to feelings of relative superiority.

Social Justice Theory

A framework for understanding and advocating for equality, human rights, and fair treatment of individuals in society, addressing issues of oppression and privilege.