A Depression Can Be Defined As

question 59

Multiple Choice

A depression can be defined as:

• A)a mild reduction in total production coupled with a rising unemployment rate that lasts for several years.
• B)a mild decline in total production that lasts less than six months.
• C)a severe fall in stock prices that causes financial panic and lasts for several years.
• D)a severe reduction in total production coupled with high unemployment that lasts for several years.
• E)a decline in government spending and taxes that lasts for several months.

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Definitions:

Arithmetic Average Return

The simple average of a series of returns over a period of time, calculated by summing the returns and dividing by the number of periods.

Jensen's Measure

A performance evaluation measure that calculates the excess return a fund generates over its expected return, given its level of risk.

Risk-Free Return

The theoretical return on an investment with no risk of financial loss, often represented by the yield on government securities such as U.S. Treasury bonds.

Beta

A measure of a security's volatility in relation to the overall market; a beta greater than 1 indicates greater volatility than the market.