The Expected Returns of Different Assets, Adjusted for Risk, Should

question 30

Multiple Choice

The expected returns of different assets, adjusted for risk, should be:

• A) equal.
• B) different.
• C) sometimes equal but often different.
• D) unknown in most cases.

---

Definitions:

Pure Monopolist

A market structure where a single firm is the sole producer for a product or service, with no close substitutes, giving it significant market power.

Perfectly Elastic

describes a market situation in which the quantity demanded or supplied changes infinitely in response to any change in price.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, indicating overall profitability beyond breakeven.

Monopolistically Competitive

Describes a market structure where many firms sell products that are similar but not identical, allowing for significant competition but also some degree of market power for individual firms.