While Their Respective Subject Matters Differ Greatly, Both Microeconomists and Macroeconomists

question 20

Multiple Choice

While their respective subject matters differ greatly, both microeconomists and macroeconomists rely on the same basic tools; that is, both rely on

• A)government contracts to promote research and publications.
• B)demand and supply analysis.
• C)the economic theory of John Maynard Keynes.
• D)consumer protection laws and antitrust legislation.

Distinguish between systematic risk, unsystematic risk, total risk, and their relevance to portfolio management.

Calculate and interpret the expected return on assets and portfolios under various economic states.

Understand the role of the risk-free rate and market rate of return in determining asset pricing.

Identify the relationship between risk and return and the significance of the Security Market Line (SML).