A Considerable Scattering in the Plot of Points Representing the Historic

question 41

Multiple Choice

A considerable scattering in the plot of points representing the historic returns of a stock versus the returns on the market indicates the:

• A)high Beta of the stock.
• B)unique risk of the stock.
• C)changes in market risk premium over time.
• D)current underpricing of the stock.

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Definitions:

Inflation

The speed at which the overall price level for goods and services increases, causing a decline in the value of money.

Deflation

A decrease in the general price level of goods and services in an economy over a period of time.

Cyclical Unemployment Rate

The component of overall unemployment that corresponds to the cyclical conditions of an economy, fluctuating with the business cycle.

Overall Unemployment Rate

The scope of unemployment in the labor force, focusing on those actively seeking employment.