Under a Consumption-Based Theory of the Pricing of Risky Assets,uncertain

question 18

Multiple Choice

Under a consumption-based theory of the pricing of risky assets,uncertain returns on such an asset should be discounted by a "stochastic discount factor" that takes into account:​

• A)​the mean and standard deviation of the uncertain return.
• B)​whether the uncertain return has a normal distribution.
• C)​both the nominal and real interest rates.
• D)​the rate of time preference and present and future marginal utility of wealth.

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Definitions:

Sales Orientation

A business approach that prioritizes selling products and services over understanding or meeting the actual needs and desires of the customers.

Salesperson

A salesperson is an individual who sells goods or services to customers, often working on behalf of a company to facilitate transactions and promote sales.

Wise Customer

A term reflecting a customer who is informed, discerning, and judicious in their purchasing decisions, often seeking value and quality.

Personal Selling

A sales method involving direct face-to-face communication between a salesperson and a potential buyer.