An Increase in Nondiversifiable Risk

question 105

Multiple Choice

An increase in nondiversifiable risk

• A) would cause an increase in the beta and would lower the required return.
• B) would have no effect on the beta and would, therefore, cause no change in the required return.
• C) would cause an increase in the beta and would increase the required return.
• D) would cause a decrease in the beta and would, therefore, lower the required rate of return.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a specified period.

Agricultural Economist

A professional specializing in the study and application of economic principles within the agricultural sector, focusing on maximizing efficiency and productivity.

Corn Prices

The cost at which corn is bought or sold, which can fluctuate based on factors like supply, demand, and market conditions.

Supply and Demand Curves

Graphical representations used in economics to show the relationship between the quantity of a good that producers wish to sell at various prices and the quantity that consumers wish to buy.