A Transformer Is a Device Used to

question 1

Multiple Choice

A transformer is a device used to

• A)transform an alternating current into a direct current.
• B)transform a direct current into an alternating current.
• C)increase or decrease an ac voltage.
• D)increase or decrease a dc voltage.

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Definitions:

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the market as a whole.

Market Risk Premium

The extra return expected by investors for taking on the risk of investing in the stock market over a risk-free rate.

Security Market Line

A line representing the relationship between the expected return of a market security and its risk, as measured by beta.

Systematic Risk

The collective risk for all investments in a market or a specific part of the market that cannot be offset through diversification.