The probability distribution of the payoffs on an investment refers to a _____.

1. a.measure of the extent to which the payoffs move with the capital market
2. b.listing of the degree of relationship between the probabilities of two payoffs
3. c.measure of the tightness, or variability, of a set of payoffs
4. d.standardized measure of the risk per payoff
5. e.listing of all possible outcomes with a chance of occurrence assigned to each outcome

The chance of receiving an actual return that differs from the one that is expected is called _____.

a.change in beta

b.beta

c.risk

d.probability distribution

e.payoff

The market for a stock is said to be in equilibrium when the _____.

1. a.expected return on the stock is equal to its historical return
2. b.expected return on the stock is equal to its required return
3. c.expected return on the stock is equal to the risk-free rate
4. d.expected return on the stock is equal to the market return
5. e.expected return on the stock is equal to the market risk premium