In the Equilibrium World of the CAPM, a Security That

question 14

Multiple Choice

In the equilibrium world of the CAPM, a security that is not part of the market portfolio is all of the following EXCEPT

• A) not owned by investors
• B) has an equilibrium price zero
• C) attractive to the very risk-averse investor
• D) has a market value of zero

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Definitions:

Semantic Relationship

A connection between words in language based on the similarity of their meanings.

Whorfian Hypothesis

The proposal that the language one speaks determines or heavily influences the thoughts one can think or the saliency of different categories of thought.

External Environment

Refers to all outside factors and influences that impact the operation and performance of an entity, organization, or system.

Backwards Speech

Backwards Speech is the process of speaking words in reverse order or producing sounds as if a recording of normal speech were being played backward.