A Decrease in Demand and an Increase in Supply Will

question 101

Multiple Choice

A decrease in demand and an increase in supply will:

• A)increase the equilibrium quantity and decrease price.
• B)decrease the equilibrium quantity and affect price in an indeterminate way.
• C)decrease price and affect the equilibrium quantity in an indeterminate way.
• D)increase price and affect the equilibrium quantity in an indeterminate way.

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Definitions:

Risk-free Rate

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

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates greater volatility than the market, while a beta below 1 suggests less.

Average Returns

The arithmetic mean of the historical returns of an investment, often used as a general indication of its past performance.

Hedge Funds

are investment funds that employ a variety of strategies to earn active return, or alpha, for their investors, often involving higher risks and aiming for higher returns than traditional investments.