The Rawlsian Position Holds That Points That Are Not on the Utility

question 22

Multiple Choice

The Rawlsian position holds that points that are not on the utility possibilities frontier and therefore represent ______________ allocations may be desirable from a moral perspective if they are more ______________.

• A) inefficient, equitable
• B) inefficient, inequitable
• C) equitable, inefficient

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Definitions:

Cost of Equity

The expected return on investment required by shareholders, representing the compensation for investing in a company's equity and assuming the associated risk.

Market Return

The total return on an investment or portfolio over a given period, including capital gains and dividends, relative to the overall market.

Beta

A measure of a stock's volatility in relation to the overall market, indicating its sensitivity to market movements.

Dividend Growth Rate

The annual percentage increase in dividends paid out by a company to its shareholders.