Suppose You Have 2 Goods,X and Y

question 181

Multiple Choice

Suppose you have 2 goods,X and Y.If the price of X decreases and you buy more Y,then X and Y are

• A) substitutes.
• B) normal goods.
• C) complements.
• D) inferior goods.

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Definitions:

Portfolio Beta

A measure that evaluates the risk of an investment portfolio by determining how sensitive it is to market movements.

Risk-Free Asset

An investment with a guaranteed return and no risk of loss, often exemplified by government bonds.

Market Portfolio

A market portfolio is a theoretical bundle of investments that includes every type of asset available in the world financial market, with each asset weighted by its market capitalization.

Beta

An indicator of how much a stock's price movement varies compared to the general market, signifying its relative risk to the market norm.