Which of the Following Is True Regarding M2? It Produces

question 58

Multiple Choice

Which of the following is true regarding M2? It produces a measure of portfolio performance that:

• A) is adjusted for systematic risk.
• B) can be compared directly to the risk-free rate.
• C) can be compared directly with the market return.
• D) indicates what would be possible if the portfolio was fully leveraged.

---

Definitions:

Federal Budget Deficit

The shortfall that occurs when the U.S. government's expenditures exceed its revenues within a fiscal year.

GDP

Gross Domestic Product, or GDP, represents the overall market value of all ultimate goods and services manufactured domestically in a specific timeframe.

Interest Rates

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage of the total amount loaned or deposited.

Federal Budget Deficits

Occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings.