In the Accompanying Graph, Point Y Represents the

question 23

Multiple Choice

In the accompanying graph, point Y represents the

• A)rate of return for the market portfolio.
• B)rate of return for the risk-free asset.
• C)risk premium for the market portfolio.
• D)compensation for time preference for a given asset.

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Definitions:

Variable

An element, feature, or factor that is liable to vary or change.

Scientific Method

is a systematic approach to research and experimentation used to explore observations and answer questions by making hypotheses and testing them.

Theory

A system of ideas intended to explain something, often based on general principles independent of the thing to be explained.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.