It Is Expected That the Price of a Tonne of Wheat

question 110

Multiple Choice

It is expected that the price of a tonne of wheat will increase in one month.This belief will result in

• A)a decrease in the future supply of wheat.
• B)an increase in the current supply of wheat.
• C)an increase in the current quantity supplied of wheat.
• D)a decrease in the current supply of wheat.
• E)no change in the current or future supply of wheat.

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Definitions:

Total Risk

The complete range of risks associated with an investment, including both systematic risk (market related) and unsystematic risk (company or industry specific).

Standard Deviation

A measure of the dispersion or variability of a set of data points from its mean, often used in finance to gauge investment risk.

Risk Premium

The extra return above the risk-free rate that investors require to compensate them for holding a risky asset.

Bearing Risk

The act of accepting potential loss from uncertainty in investment or business operations.