Returns on Systematic Risk-Free Securities (Like U

question 39

Multiple Choice

Returns on systematic risk-free securities (like U.S.Treasury securities) should exhibit what type of correlation with returns on a diversified marketwide portfolio of stocks?

• A) nearly perfect correlation.
• B) perfect correlation.
• C) no correlation.
• D) Unable to tell without specifics about the portfolio.

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Definitions:

Higher Taxes

Increased governmental charges on individuals' income, property, or goods, used to fund public services and governmental operations.

Social Inequality

Uneven opportunities and rewards exist for different social standings or positions within a group or society.

Genetically Programming

Creating modifications or specific outcomes in the genetic makeup of organisms through biotechnological methods. Also known as genetic engineering.

Natural Evolution

The gradual process by which biological species undergo changes over time through variation and selection.