Suppose That Velocity Rises While the Money Supply Stays the Same.It

question 57

Multiple Choice

Suppose that velocity rises while the money supply stays the same.It follows that

• A)P x Y must rise.
• B)P x Y must fall.
• C)P x Y must be unchanged.
• D)the effects on P x Y are uncertain.

Understand the Capital Allocation Line (CAL) and its significance.

Differentiate among different types of risks (market risk, unique risk, firm-specific risk, diversifiable risk).

Be familiar with Markowitz portfolio theory and the concept of optimal risky portfolio.

Calculate and interpret the expected rates of return and standard deviations for portfolios.

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Definitions:

Asset Account

A record in the financial statements that shows the value of a company's assets, including current, fixed, tangible, and intangible assets.

Liability Accounts

Financial accounting ledgers that record amounts owed to creditors or suppliers.

Debits

Accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.