Which of the Following Statements Is Correct

question 148

Multiple Choice

Which of the following statements is correct?

• A)A portfolio with a large number of randomly selected stocks would have more market risk than a single stock that has a beta of 0.5, assuming that the stock's beta was correctly calculated and is stable.
• B)If a stock has a negative beta, its expected return must be negative.
• C)A portfolio with a large number of randomly selected stocks would have less market risk than a single stock that has a beta of 0.5.
• D)According to the CAPM, stocks with higher standard deviations of returns must also have higher expected returns.

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Definitions:

Proximal Stimulus

The physical energy from a stimulus as it directly interacts with sensory receptors.

Marr's Constructivist Approach

Marr's constructivist approach refers to the idea in cognitive science that the brain constructs a representation of the external world based on sensory input, incorporating principles of processing at multiple levels.

Top-Down Processes

Cognitive processes that are driven by higher mental processes, such as experience and expectations, influencing how we perceive the world.

Template-Matching Theory

A theory of recognition that posits individuals use stored templates or patterns in their memory to recognize objects.