If Susan Switches from Going to Speedy Lube for an Oil

question 52

Multiple Choice

If Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself,then GDP

• A) necessarily rises.
• B) necessarily falls.
• C) will be unaffected because the same service is produced in either case.
• D) will be unaffected because car maintenance is not included in GDP.

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Definitions:

Beta

A criterion for quantifying the instability or systematic risk of a security or a portfolio in contrast to the market as a whole.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, adjusted for the risk-free rate.

Beta

A rephrasing: A statistical estimate of a security's sensitivity to market movements, used to gauge its risk in comparison to the broader market.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a given level of market risk.