Which of the Following Is a Similarity Between the Japanese

question 65

Multiple Choice

Which of the following is a similarity between the Japanese experience of the 1990s and the U.S.economic downturn in 2008-2009?

• A)Stable real estate and stock market prices eventually led to an economic downturn.
• B)Both Japan and the U.S.tightened lending standards and this eventually led to a substantial decline in real estate prices.
• C)The collapse of stock and real estate prices led to the failure of highly leveraged banking and financial institutions.
• D)Neither Japan nor the U.S.had experienced a recession since the time of the Great Depression.

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Definitions:

Risk-Free Asset

An investment with zero default risk, typically government bonds, providing a basis for comparing with riskier assets.

Beta

A method for appraising the degree of variation, or consistent peril, of a security or investment pool versus the market at large.

Expected Return

The anticipated amount of profit or loss an investment is likely to generate over a given period.

Market Return

The total return on investment in the stock market, comprising capital gains and dividends, over a specific period.