Which of the Following Statements Is CORRECT

question 3

Multiple Choice

Which of the following statements is CORRECT?

• A) The CAPM is an ex ante model,which means that all of the variables should be historical values that can reasonably be projected into the future.
• B) The beta coefficient used in the SML equation should reflect the expected volatility of a given stock's return versus the return on the market during some future period.
• C) The general equation: Y = a + bX + e,is the standard form of a simple linear regression where b = beta,and X equals the independent return on an individual security being compared to Y,the return on the market,which is the dependent variable.
• D) The rise-over-run method is not a legitimate method of estimating beta because it measures changes in an individual security's return regressed against time.
• E) ​The Security Market Line (SML)shows the relationship between risk as measured by beta and the required rate of return for all securities.

Understand the use of pronouns in different contexts by recognizing the proper form.

Differentiate between singular and plural pronouns based on context.

Identify and correct pronoun errors in sentences.

Apply the appropriate pronouns in given contexts.

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Definitions:

Self-Protective Device

Mechanisms or behaviors that individuals employ to safeguard themselves from psychological or emotional harm, often occurring at both conscious and unconscious levels.

Basic Anxiety

A term in psychoanalysis that represents feelings of insecurity and apprehension that arise from interpersonal relationships.

Psychological Withdrawal

A defense mechanism where an individual mentally disengages or detaches from stressful or emotional situations.

Feelings of Security

A sense of safety and freedom from worry or danger.