Which of the Following Is Not One of the Reasonable

question 64

Multiple Choice

Which of the following is not one of the reasonable conclusions of the CAPM reached by a consensus of the empirical results?

• A)The intercept term is generally higher than the RF.
• B)The SML appears to be non-linear.
• C)The slope of the CAPM is generally less steep than suggested by the theory.
• D)CAPM is an imperfect model for the explanation of the cross section of security returns.

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Definitions:

Associated Response

A reaction that is commonly linked or connected to a specific trigger or set of conditions.

Secondary Reward

A reward that does not satisfy a biological need but is desirable due to its association with primary rewards or intrinsic satisfaction.

Tolman

A psychologist known for his work in cognitive behaviorism, particularly the concept of latent learning and the use of cognitive maps.

Goal Object

The target or object of a person's ambition or effort; an aim or desired result.