A Stock Whose Rate of Return Fluctuates Less Than the Rate

question 13

Multiple Choice

A stock whose rate of return fluctuates less than the rate of return of a market portfolio will have a beta that equals

• A)1)
• B)less than 1.
• C)more than 1.
• D)Either A or C above

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Definitions:

Heuristics

Mental shortcuts that ease the cognitive load of making decisions or solving problems.

Algorithms

Step-by-step problem-solving procedures or formulas that guarantee a solution to a problem if correctly applied.

Primary Mental Abilities

According to Thurstone, the basic abilities that make up intelligence examples include word fluency and numerical ability.

Louis Thurstone

An influential American psychologist known for his contributions to psychometrics, including factor analysis and the development of psychological scales.