Consider the Following Statement: "It Is Undesirable for Canada to Have

question 3

Multiple Choice

Consider the following statement: "It is undesirable for Canada to have a current account deficit." Which of the following is implied by this statement?

• A)Canada should not borrow from,or sell assets to,the rest of the world.
• B)Canada should export more goods than it imports.
• C)The government of Canada should not be involved in buying or selling foreign exchange.
• D)Canada should import more than it exports.
• E)Canada should always have a budget surplus.

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Definitions:

SML

The Security Market Line, a representation in the Capital Asset Pricing Model (CAPM) that shows the expected return of a security or portfolio as a function of its systematic risk.

Expected Return

The anticipated amount of profit or loss an investment generates over a given period of time.

Standard Deviation

A statistical measure of the dispersion or variability in a set of data, often used in finance to quantify the risk associated with a security or investment portfolio.

Coefficient Of Variation

A standardized measure of the dispersion of a probability distribution or frequency distribution, used to assess risk relative to expected returns.