Unanticipated Restrictive Monetary Policy Would Tend to Cause

question 23

Multiple Choice

Unanticipated restrictive monetary policy would tend to cause

• A) real interest rates to rise.
• B) the exchange rate value of the dollar to fall (the dollar to depreciate).
• C) loans to become more available for small businesses.
• D) asset prices to rise.

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Definitions:

Betas

A measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole, often used in the Capital Asset Pricing Model.

Standard Deviation

A statistical measure of variance or dispersion in a set of values, commonly used to assess investment risk.

Expected Return

The anticipated amount of profit or loss an investment is projected to yield based on historical or estimated future performance.

Beta

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