Assume There Is a Reduction in the Shipments of Petroleum

question 17

Multiple Choice

Assume there is a reduction in the shipments of petroleum products due to political tension in the Persian Gulf.Which of the following would not be expected to happen?

• A)Oil companies would "ration" their supplies of gasoline by raising price.
• B)There would be a shortage of the original equilibrium price.
• C)Quantity demanded would decrease.
• D)The demand curve would shift to the left.

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification.

Beta Value

A measure of a stock's volatility in relation to the overall market, indicating the level of risk associated with the stock.

Unsystematic Risk

The risk associated with a specific company or industry, also known as non-systemic risk, which can be mitigated through diversification.

Risk Premium

The extra return expected by investors for taking on a higher level of risk compared to a risk-free investment.