Professors Harry Markowitz and William Sharpe Received Their Nobel Prize

question 11

Multiple Choice

Professors Harry Markowitz and William Sharpe received their Nobel Prize in Economics for their contributions to the

• A)options pricing model.
• B)theories of working capital management.
• C)theories of risk-return and portfolio management.
• D)theories of international capital budgeting.

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Definitions:

Consumer Price Index

An indicator that calculates the weighted mean of the cost of a collection of consumer products and services, including transportation, food, and healthcare, employed to gauge inflation rates.

Inflation Rate

The enhancement of the overall price tag of goods and services in an economy throughout a specific period.

Consumer Price Index

A statistical estimate that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, indicating the rate at which purchasing power is eroding.