One Common Source of Market Failure Is

question 80

Multiple Choice

One common source of market failure is

• A) perfect competition.
• B) pollution.
• C) perfect information.
• D) private goods.

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Definitions:

CAPM

Capital Asset Pricing Model; a formula used to determine the expected return on an investment, factoring in its risk relative to the market.

Risk-to-reward Ratio

A measure used by investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Constant

A fixed value that does not change in mathematical equations or in the context of specific calculations.