For Each 1% Change in the Market Portfolio's Excess Return

question 79

Multiple Choice

For each 1% change in the market portfolio's excess return, the investment's excess return is expected to change by ________ due to risks that it has in common with the market.

• A) beta
• B) alpha
• C) 0%
• D) 1%

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most economically efficient way, often characterized by the absence of cyclical unemployment.

Unemployment Rate

The statistic representing the percentage of the labor force that is out of work but seeking employment.

World War II

A global conflict lasting from 1939 to 1945, involving most of the world's nations including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.

Social System

A complex set of human relationships interacting in many ways within a community or society.