While ________ Seems to Be a Reasonable Measure of Risk

question 96

Multiple Choice

While ________ seems to be a reasonable measure of risk when evaluating a large portfolio, the ________ of an individual security does not explain the size of its average return.

• A) volatility, volatility
• B) the mean return, standard deviation
• C) mode, volatility
• D) mode, mean return

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Definitions:

Income Elasticity

A measure of how much the demand for a product changes with a change in consumers' income.

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income.

Inferior Good

A type of good whose demand decreases when consumer income rises, unlike normal goods for which the opposite is true.

Marginal Utility

The additional satisfaction or utility gained by consuming an additional unit of a good or service.