The Goal a Standards and Charges System Is to Reduce

question 29

Multiple Choice

The goal a standards and charges system is to reduce the externality to the

• A) level acceptable to the government
• B) socially optimal level
• C) level where private marginal cost equals price

---

Definitions:

Required Return

Required return is the minimum expected return by investors for investing in a stock, bond, or another security, considering its risk.

Expected Market Return

The average return anticipated from an investment in the broader market, serving as a benchmark for evaluating investment performance.

Beta

A measure of a stock's volatility in comparison to the market as a whole.

Risk Premium

The additional return required by an investor for tolerating a higher level of risk compared to a safe investment.