If Treasury Bills Are Yielding 10% at a Time When

question 101

Multiple Choice

If Treasury bills are yielding 10% at a time when the market risk premium is 6%, then the:

• A)Market portfolio should yield 4%
• B)Market portfolio should yield 6%
• C)Market portfolio should yield 16%
• D)Market portfolio should yield 22%

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Definitions:

Transaction Cost

Expenses incurred when buying or selling goods or services, beyond the price of the goods or services themselves.

Specialized Resources

Resources uniquely suited or trained to perform specific tasks or functions within an economic system, enhancing efficiency and productivity.

Opportunity Cost

The financial loss associated with rejecting the subsequent optimal choice in any decision-making scenario.

Specialized Tools

Equipment or instruments designed for specific tasks or professions, enhancing efficiency and precision.