Which Statement Is Correct Concerning Macro Risk Exposure

question 94

Multiple Choice

Which statement is correct concerning macro risk exposure?

• A) All firms face equal macro risk exposure.
• B) Only portfolios of stocks face macro risk exposure.
• C) Macro risk exposure affects the cost of capital.
• D) Macro risk exposure is less important to diversified investors than micro risk exposure.

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Definitions:

Increasing Returns

A situation where the input in a production process is increased and the output increases at a proportionally higher rate.

Price Discrimination

Charging different prices to different consumers for the same good.

Price Fixing

An illegal agreement among competitors to set, raise, or lower prices to predetermined levels, thereby undermining free market competition.

Deadweight Loss

A loss in economic efficiency that can occur when equilibrium for a good or service is not achieved or is not achievable.