The Term ε Is A(n)

question 38

Multiple Choice

The term ε is a(n) :

• A)measure of the expected percent change in the excess return of a security for a 1% change in the excess return of the first factor portfolio.
• B)error term that has an expectation of zero and is uncorrelated with either factor.
• C)measure of the expected percent change in the excess return of a security for a 1% change in the excess return of the second factor portfolio.
• D)constant term.

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Definitions:

Occupational Licensing

The laws of state or local governments that require that a worker satisfy certain specified requirements and obtain a license from a licensing board before engaging in a particular occupation.

Exclusive Unionism

The policy, pursued by many craft unions, in which a union first gets employers to agree to hire only union workers and then excludes many workers from joining the union so as to restrict the supply of labor and drive up wages. Compare with inclusive unionism. The policies typically employed by a craft union.

Imperfectly Competitive Input Markets

Markets where the factors of production (inputs) are bought and sold, and where no single buyer or seller can influence prices significantly due to the presence of many competitors, but not enough for perfect competition.

Variable Resources

Inputs that can be adjusted in the short term to meet changes in the level of production, such as labor or raw materials.