Necessity Assets Are Assets

question 18

Multiple Choice

Necessity assets are assets

• A)used by savers to conduct regular transactions.
• B)with wealth elasticities of greater than 1.
• C)held by savers for investment.
• D)not subject to federal income tax.

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Definitions:

Macro Events

Large-scale events that affect the broad economy or financial markets, including political changes, natural disasters, or widespread economic shifts.

Firm-Specific Events

Events that affect a particular company directly, such as earnings reports, mergers, or product launches, which can impact the company's stock price independent of market trends.

Portfolio Risk

The level of uncertainty or potential financial loss inherent in an investment portfolio.

CAPM

The Capital Asset Pricing Model is a formula used to determine the theoretical expected return of an investment, considering its risk relative to the market.