The Capture Theory of Regulation Holds That

question 148

Multiple Choice

The capture theory of regulation holds that

• A)regardless of the motive for the initial regulation and the establishment of the regulatory agency, eventually the special interests of the industry that is being regulated will be "captured" (controlled) by the regulatory agency.
• B)regardless of the motive for the initial regulation and the establishment of the regulatory agency, eventually the regulatory agency will be "captured" (controlled) by the special interests of the industry that is being regulated.
• C)whether or not the special interests of the industry that is being regulated will be "captured" (controlled) by the regulatory agency depends on the motive for the initial regulation and the establishment of the regulatory agency.
• D)whether or not the regulatory agency will be "captured" (controlled) by the special interests of the industry depends on the motive for the initial regulation and the establishment of the regulatory agency.

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Definitions:

Risk-Aversion Coefficients

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Treynor-Black Model

A portfolio optimization model that blends a passively managed market index and active stock selections to maximize performance.

Nonsystematic Standard Deviation

A measure of the variability of an investment's return due to factors specific to the investment or its issuer, excluding broader market influences.

Macroeconomic Risks

Considered broad economic or political uncertainties that could affect the performance of financial markets and investments globally.