The Intercept of a Budget Line Measures the

question 129

Multiple Choice

The intercept of a budget line measures the

• A)amount of a good that a consumer will purchase
• B)maximum amount of a good that a consumer could purchase,given his consumption of some other good
• C)maximum amount of a good that could be consumed at given prices and income
• D)minimum amount of a good that could be consumed at given prices and income
• E)minimum consumption of a good consistent with utility maximization

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Definitions:

Systematic Risk

The inherent risk that affects the entire market or a wide range of securities, often caused by factors like economic, political, or global events, and cannot be mitigated just by diversification.

Beta

Beta is a measure of a stock's volatility in relation to the overall market, indicating the stock's risk compared to that of the market.

Market Portfolio

A theoretical bundle of investments that includes every type of asset available in the market, with each asset weighted according to its total market value.

Beta

A measure of a security's volatility in relation to the market, indicating its relative riskiness.