Which of the Following Examples Illustrates Estimation

question 36

Multiple Choice

Which of the following examples illustrates estimation?

• A)The actual percentage of unemployed Americans
• B)The varying valid percentages of Republicans and Democrats who closely follow controversial political news
• C)The actual average level of education in the United States
• D)The percentage of Americans who favor gay and lesbian relations as approximated by the Gallup organization

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Definitions:

Security Market Line

A line representing the relationship between the expected return of a market security and its risk, as measured by beta.

Systematic Risk

The collective risk for all investments in a market or a specific part of the market that cannot be offset through diversification.

Unsystematic Risk

The danger linked to a certain company or sector that can be reduced by spreading investments across a varied portfolio.

Political Risk

The risk of loss faced by investors, corporations, and governments due to political decisions, unrest, or instability in a country.