Which of the Following Statements Best Summarizes "Contract Theory" as Spelled

question 70

Multiple Choice

Which of the following statements best summarizes "contract theory" as spelled out by philosopher Thomas Hobbes?

• A)The government should be required to return to citizens any excess taxation revenue that is collected in a given year.
• B)Each citizen should be required to serve in the military for at least two years starting at the age of 18.
• C)The people of a country voluntarily give up some freedom in exchange for an ordered society.
• D)Every business should be managed by the government in order to ensure an equitable distribution of wealth.

---

Definitions:

Inefficient Market

A market where securities' prices do not fully reflect all available information, leading to potential for abnormal returns.

Standard Deviation

A statistic that measures the dispersion or spread of a set of data points around their mean.

Level Of Risk

A measure of the potential for loss in an investment or business situation.

Variance

Variance is a statistical measurement that describes the spread of numbers in a data set, indicating how much the numbers differ from the average value.