By 2007, the Deficit

question 67

Multiple Choice

By 2007, the deficit

• A)was out of control and increased substantially soon thereafter.
• B)seemed under control but increased substantially soon thereafter.
• C)was out of control but decreased substantially soon thereafter.
• D)seemed under control and decreased substantially soon thereafter.

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Definitions:

Neglected-firm Effect

A theory suggesting that lesser-known, smaller companies can provide higher returns than their larger counterparts due to lack of analyst coverage.

Excess Returns

Returns on an investment that exceed a benchmark or average return, indicating higher-than-expected performance.

Abnormal Returns

Returns on a security or portfolio that exceed what is predicted by market models, such as the CAPM, indicating outperformance.

Hyman Minsky

An American economist known for his theories on financial instability and the inherent tendency of financial markets to move towards crisis.