Refer to the Diagram

question 15

Multiple Choice

Refer to the diagram. A decrease in demand is depicted by a

• A) move from point x to point y.
• B) shift from D1 to D2.
• C) shift from D2 to D1.
• D) move from point y to point x.

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Definitions:

Total Risk

The complete range of risks involved in an investment, encompassing both systematic and unsystematic risks.

Expected Return

The anticipated amount of profit or loss an investment is expected to generate over a given period.

Securities

Financial instruments that represent ownership positions in corporations (stocks), creditor relationships with corporations or governmental bodies (bonds), or rights to ownership as represented by an option.

Capital Allocation Line

A line on a graph that shows the risk-reward ratio of portfolios that combine a risk-free asset and a risky portfolio.