The Sensitivity of a Stock's Returns to the Returns on a Market

question 81

Multiple Choice

The sensitivity of a stock's returns to the returns on a market portfolio is referred to as the:

• A)stock's market risk premium.
• B)Stock's Beta.
• C)market portfolio's systematic risk.
• D)stock's unique risk.

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Definitions:

Baseballs

Spherical balls used in the game of baseball, made of rubber or cork center wrapped in yarn and covered in leather.

Market Forces

The natural effects of supply and demand that determine prices and resource allocation in a market economy.

Collective Decision-Making

The use of the political process (voting, taxes, government spending, regulation, political bargaining, lobbying, and so on) to make decisions and allocate resources. In a democratic setting, the votes of citizens and their representatives will determine the actions undertaken.

Basic Economic Questions

Fundamental questions that every economic system must address: What to produce, how to produce, and for whom to produce.