The Rate of Return That Financial Investors Require to Hold

question 24

Multiple Choice

The rate of return that financial investors require to hold a risky asset minus the rate of return on a safe asset is called the:

• A)real interest rate.
• B)nominal interest rate.
• C)risk premium.
• D)discount rate.

---

Definitions:

Output Quota

A limit set, usually by a governing body, on the amount of a product that can be produced or sold within a certain period.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and often higher prices.

Collusive Control

Practices whereby firms in the same industry conspire to control market competition, often through price fixing, market allocations, or production quotas, in violation of antitrust laws.

Collusive Control

A situation where firms in a market agree to set prices or output levels to maximize their collective profits, often at the expense of fair competition.