A Worker Would Be Hurt Least by Inflation When The

question 99

Multiple Choice

A worker would be hurt least by inflation when the:

• A)worker anticipates inflation and increases savings at the bank.
• B)worker is protected by a cost-of-living adjustment clause in an employment contract.
• C)the price level increases but at a decreasing rate.
• D)worker is protected by fixed annual increases in wages and benefits in an employment contract.
• E)government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation.

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Definitions:

Security A

This is not a specific financial term; often "Security A" could refer to a generic or hypothetical security in examples or educational content.

Firm's Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 means the stock is more volatile than the market, while a beta less than 1 means it is less volatile.

Single-Factor Market Model

A financial model that explains a security's returns as the outcome of a single market-wide factor and the security's sensitivity to that factor.

Unsystematic Risk

The risk associated with a specific company or industry that can be mitigated through diversification.