If the Rate of Inflation Overseas Rises Relative to the Rate

question 81

Multiple Choice

If the rate of inflation overseas rises relative to the rate of inflation in the United States, U.S. net exports will tend to ____, causing the exchange value of the U.S. dollar to ____.

• A)​rise; rise
• B)​rise; fall
• C)​fall; rise
• D)​fall; fall

Describe the impact of the risk-free rate on stock and portfolio returns.

Distinguish between systematic (market) risk and unsystematic (diversifiable) risk.

Understand the Capital Asset Pricing Model (CAPM) and its applications to investment decisions.

Analyze the impact of portfolio composition on expected return and risk.

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Definitions:

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