Which of the Following Would Make Cheating on a Collusive

question 124

Multiple Choice

Which of the following would make cheating on a collusive agreement more likely?

• A)greater ease of observing other firms' prices
• B)a reduction in the number of sellers in the market
• C)close monitoring by the Department of Justice
• D)more frequent shifts in market demand
• E)an increase in the number of customers in the market

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Definitions:

Systematic Risk

Systemic risk associated with the overall market or a particular segment of the market, widely known as market risk, remains even after diversification efforts.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the overall market.

Security Market Line

A representation in financial market theory plotting the expected return of an asset or a portfolio against its risk (beta), under the Capital Asset Pricing Model.

Diversified Investors

Individuals or entities that spread their investments across various asset classes and sectors to minimize risk.