Which of the Following Is Not a Reason Why Government

question 102

Multiple Choice

Which of the following is not a reason why government agencies subsidize basic research?

• A)The private market devotes too few resources to basic research.
• B)The general knowledge developed through basic research can be used without charge.
• C)The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies.
• D)The government wants to attract the brightest researchers away from private research firms.

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Definitions:

Multifactor CAPM

An extension of the Capital Asset Pricing Model (CAPM) that incorporates multiple factors in the assessment of risk and expected return of an asset, beyond just the market risk.

Hedge Portfolios

Investment strategies designed to reduce or mitigate risk in an investment portfolio by making counterbalancing investments, often involving derivatives.

Risk Factors

Elements or conditions that may potentially result in a negative impact on the performance or value of an investment.

APT

Stands for Arbitrage Pricing Theory, a financial model that determines asset prices based on the relationship between expected risk and expected return.