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In the Results of the Earliest Estimations of the Security

Question 5

Multiple Choice

In the results of the earliest estimations of the security market line by Lintner (1965) and by Miller and Scholes (1972) , it was found that the average difference between a stock's return and the risk-free rate was ________ to its nonsystematic risk.


A) positively related
B) negatively related
C) unrelated
D) related in a nonlinear fashion

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