Which of the Following Statements Is True

question 102

Multiple Choice

Which of the following statements is true?

• A) Lack of information relating to the job market can lead to unemployment.
• B) There is no voluntary unemployment at the equilibrium wage rate.
• C) If the supply of labor exceeds the demand for labor, wage rates tend to rise.
• D) If the demand for labor exceeds the supply of labor, wage rates tend to fall.

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Definitions:

Overpriced Security

A security trading at a price believed to be higher than its theoretical value or intrinsic worth.

Expected Market Rate

The anticipated rate of return on an investment as predicted by investors based on historical market data and trends.

Abnormal Return

Return on a stock beyond what would be predicted by market movements alone. Cumulative abnormal return (CAR) is the total abnormal return for the period surrounding an announcement or the release of information.

Mean-Variance Optimizers

Tools used in finance to allocate assets in a portfolio in a way that maximizes return for a given level of risk based on the expected returns and variances of those assets.