When Some Fraction of the Benefit of an Activity Is

question 36

Multiple Choice

When some fraction of the benefit of an activity is received by people not participating in the activity,it is called a(n) :

• A)winner's curse.
• B)positive externality.
• C)external cost.
• D)efficient allocation.

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Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with no risk of financial loss.

Portfolio Beta

Portfolio Beta is a measure of the overall systematic risk of a portfolio of investments relative to the market as a whole.

Exchange-Traded Fund

An Exchange-Traded Fund (ETF) is a type of investment fund and exchange-traded product, the shares of which are traded on stock exchanges.

Market Beta

A measure of a stock's volatility in relation to the market; a beta greater than 1 indicates higher volatility than the market.