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Viefleur [7K]
3 years ago
5

Gilberto noticed that his friend Sarah had been crossing her arms all day. To make sure his perception was accurate he asked Sar

ah if she was angry with him or just cold. Which step of the direct perception checking process did Gilberto use?
Social Studies
1 answer:
Sati [7]3 years ago
7 0

Answer:

Third step: Asking whether your interpretation was correct.

Explanation:

Perception checking refers to the process by which you test if your perceptions are accurate.

Perception checking can be direct or indirect:

  • Direct perception checking is simply asking other people if your perception of a situation is accurate. And it has 3 different stages or steps:
  1. Acknowledging the behavior you witnessed: You describe the person the behavior you saw
  2. Interpreting that behavior: You tell the person what you interpreted from that behavior. (what you thought it meant)
  3. Asking whether your interpretation was correct: You ask the person if what you actually thought was correct or not.

  • Indirect perception checking: refers to using your own skills or abilities to gather more information on what you just witnessed and reach a conclusion based on that. You do not ask the person.

In the example <u>Gilberto noticed a behavior from Sara, so he asked if she was angry with him or just call. </u>

We can say that he's given an interpretation to the behavior (she's crossing her arms because she's angry or cold), but the question actually tells us <u>that he is ASKING her which one of these options is the correct one</u> (or maybe neither of them is right and there's another explanation), so he is in the third step of the direct perception checking process: Asking whether your interpretation was correct.

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Other things held constant, if the expected inflation rate DECREASES, and investors also become MORE risk averse, the Security Market Line would shift in<u> have a steeper slope </u>manner.

<h3>What is the Security Market Line (SML)?</h3>

The security market line (SML) is the Capital Asset Pricing Model (CAPM). It gives the market’s expected return at different levels of systematic or market risk. It is also called the ‘characteristic line’ where the x-axis represents the asset’s beta or risk, and the y-axis represents the expected return.

<u>Security Market Line Equation</u>

The Equation is as follows:

SML: E(Ri) = Rf + βi [E(RM) – Rf]

In the above security market line formula:

  • E(Ri) is the expected return on the security.
  • Rf is the risk-free rate and represents the y-intercept of the SML.
  • βi is a non-diversifiable or systematic risk. It is the most crucial factor in SML. We will discuss this in detail in this article.
  • E(RM) is expected to return on market portfolio M.
  • E(RM) – Rf is known as Market Risk Premium.

<u>Characteristics of the Security Market Line (SML) are as below:</u>

  • SML is a good representation of investment opportunity cost, which combines the risk-free asset and the market portfolio.
  • Zero-beta security or zero-beta portfolio has an expected return on the portfolio, which is equal to the risk-free rate.
  • The slope of the Security Market Line is determined by the market risk premium, which is: (E(RM) – Rf). Higher the market risk premium steeper the slope and vice-versa
  • All the assets which are correctly priced are represented on SML.
  • The assets above the SML are undervalued as they give a higher expected return for a given amount of risk.
  • The assets below the SML are overvalued as they have lower expected returns for the same amount of risk.

Therefore, we can conclude that the correct option is A.

Learn more about Security Market Line (SML) on:

brainly.com/question/15877803

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