If You Were to Estimate the Expected Return on the Market

question 2

Multiple Choice

If you were to estimate the expected return on the market portfolio, you would need to know or estimate:

• A) the beta of the portfolio, the risk-free rate, and the level of the market over the next year.
• B) the risk-free rate and beta of the portfolio.
• C) the historical risk premium and the risk free rate.
• D) the level of the market over the next year, the risk-free rate, and the historical risk premium.

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Definitions:

Demand for Health Care

The total amount of health care services that consumers are willing and able to purchase at a given price level.

Price-Inelastic

A characteristic of a product or service whose demand does not significantly change with a change in its price.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Luxury

Goods or services that are considered non-essential but desirable and associated with high-quality and high price.