Because of the Shortcomings of Concentration Ratios, Some Economists Prefer

question 161

Multiple Choice

Because of the shortcomings of concentration ratios, some economists prefer another measure of competition called

• A)the Competition Index.
• B)the Marginal Revenue-Marginal Cost Index.
• C)the Economic Profit Index.
• D)the Herfindahl-Hirschman Index.

---

Definitions:

Risk-Free Rate

A speculated return on an investment that is considered to have no risk of losing money, usually indicated by the performance of government securities.

Systematic Risk

A type of risk that is associated with the overall market or a particular market segment, often called market risk.

Expected Return

The average amount of profit or loss one can anticipate receiving on an investment, accounting for all possible outcomes.

Incremental Risk

The additional risk that an investment or action brings to an investor's or company's overall risk profile.