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​To Incentivize R&D,the Government Proposes to Take on a Company's

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​To incentivize R&D,the government proposes to take on a company's costs if its product does not succeed.This would lead to


Definitions:

Risk Aversion

The reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, payoff.

High-Beta Stocks

Stocks with a beta value higher than 1, indicating they are more volatile than the overall market and potentially offering higher returns.

Yield Curve

The yield curve is a graphical representation showing the relationship between the interest rates of bonds (usually government bonds) of different maturities.

Security Market Line

A representation of the relationship between the risk of an investment and its expected return, used in the Capital Asset Pricing Model.

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