Competition Is More Likely to Exist When

question 68

Multiple Choice

Competition is more likely to exist when:

• A)there is free entry into and exit out of industries.
• B)there is a single supplier of all goods and services.
• C)the government purchases most goods and services.
• D)products are produced by a few large firms.

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Definitions:

Beta Coefficient

A gauge for assessing the risk or fluctuation level of a security or portfolio in relation to the entire market.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.

Market Risk Premium

The surplus earnings expected by investors for possessing a market portfolio with risks as opposed to secure, riskless assets.

CAPM

Capital Asset Pricing Model, a formula that describes the relationship between the expected return of an investment and its risk.