With ______ Trend,the Level of Demand Increases Initially,but Over the Long

question 87

Multiple Choice

With ______ trend,the level of demand increases initially,but over the long run,it levels off.

• A)no trend (level demand)
• B)linear trend
• C)exponential growth
• D)damped trend

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Definitions:

Security Market Line (SML)

Positively sloped straight line displaying the relationship between expected return and beta.

Arbitrage Pricing Theory (APT)

An equilibrium asset pricing theory that is derived from a factor model by using diversification and arbitrage. It shows that the expected return on any risky asset is a linear combination of various factors.

Arbitrage Pricing Theory (APT)

A financial model that estimates the price of assets based on the relationship between their expected return and macroeconomic factors that influence all assets' returns.

Market Risk Premium

The surplus return an investor aspires to earn by holding onto a market portfolio fraught with risks as compared to safeguarded, risk-free assets.