If a 1% Change in Price Leads to a 2

question 230

Multiple Choice

If a 1% change in price leads to a 2% change in quantity demanded,then the elasticity of demand is

• A)0.5.
• B)1.0.
• C)1.5.
• D)2.0.

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Definitions:

Expected Return

The anticipated yield or gain from an investment over a certain period based on historical data or probabilistic estimates, which may not be guaranteed.

Market Return

The total return on an investment, including dividends and capital gains, over a specific period, reflecting the overall performance of the financial market.

Risk-Free Rate

The theoretical return of an investment with zero risk, typically represented by the yield on government bonds.

Market Risk Premium

The additional return expected by investors for taking on the greater risk of investing in the stock market over a risk-free asset.