Expected Return Is Calculated By

question 50

Multiple Choice

Expected return is calculated by:

• A) multiplying each possible return by the probability, p, of the return occurring.
• B) adding each possible return by the probability, p, of the return occurring.
• C) dividing each possible return by the probability, p, of the return occurring.
• D) None of the above

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Definitions:

Aggregate Demand

The total market appetite for goods and services within an economy, delineated at a specific price level over an agreed time duration.

Average Price Level

An economic indicator that represents the overall level of prices in the economy by averaging the prices of all goods and services over a period.

Vertical Aggregate Supply Curve

A graphical representation where the aggregate supply does not change with the price level, indicating an economy at full employment.

Classical Economists

A group of 18th and 19th-century economists who believed in the theory that markets operate under the laws of supply and demand and that markets will self-regulate.