Reducing Risk Through the Purchase of Assets Whose Returns Do

question 10

Multiple Choice

Reducing risk through the purchase of assets whose returns do not always move together is

• A)diversification.
• B)intermediation.
• C)intervention.
• D)discounting.

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Definitions:

Price Elasticity

A measure of the sensitivity of demand for a product in response to a change in its price.

Perfectly Elastic Demand

The case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line.

Demand Curves

Graphical representations showing the quantity of a particular good that consumers are willing to buy at different price levels, assuming other factors remain constant.

Total Revenue

The total amount of money a company receives from selling its goods or services, calculated as the quantity sold multiplied by the sale price.