In the results of the earliest estimations of the security market line by Lintner (1965) 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 and ________ to its beta.
A) positively related; negatively related
B) negatively related; positively related
C) positively related; positively related
D) negatively related; negatively related
E) not related; not related
Correct Answer:
Verified
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