Which of the Following Statements Is TRUE

question 210

Multiple Choice

Which of the following statements is TRUE?
I. Competitive markets channel the self-interest of business leaders toward social prosperity.
II. Political structures often channel self-interest toward social destruction.
III. Many monopolies are government-created.

• A) I and III
• B) I and II
• C) II and III
• D) I, II, and III

---

Definitions:

Sharpe Measure

A metric used to evaluate the risk-adjusted return of an investment, calculating the difference between the returns of the investment and the risk-free rate, divided by the standard deviation of the investment’s returns.

Beta

A criterion for quantifying the instability or systematic risk of a security or a portfolio in contrast to the market as a whole.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, adjusted for the risk-free rate.

Beta

A rephrasing: A statistical estimate of a security's sensitivity to market movements, used to gauge its risk in comparison to the broader market.