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Definitions:
Economic Factors
Various elements such as inflation, unemployment rates, and GDP growth that influence the economic environment.
Diversified Portfolios
Investment strategies that spread investments across various assets to minimize risks associated with any single investment.
Equilibrium Risk Premium
The expected return on a risky asset over the risk-free rate that brings the supply and demand for the asset into balance.
Risk-free Rate
The interest rate at which an investor can invest in an absolutely risk-free security over a specified period.
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