An Example of an International Negative Externality Is When

question 40

Multiple Choice

An example of an international negative externality is when

• A)a Mexico City firm dumps hazardous chemicals into a local river.
• B)a Midwest utility burns fuel that affects trees in upstate New York.
• C)China uses copyright-protected, U.S.-made software.
• D)a U.S.firm benefits from a Japanese firm's research.
• E)a U.S.firm causes acid rain that falls in Canada.

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 is more volatile than the market.

Information Ratio

A measure of portfolio returns beyond the returns of a benchmark, typically used to assess the skill of a portfolio manager.

Residual Standard Deviation

A measure of the amount of variability or dispersion for individual data points in a regression model that cannot be explained by the predictive equation.

Beta

A rephrased measure indicating the relative risk or volatility of a security or portfolio in comparison to the broader market.