Efficiency

question 201

Multiple Choice

Efficiency

• A)and equality both refer to how much a society can produce with its resources.
• B)and equality both refer to how fairly the benefits from using resources are distributed between members of a society.
• C)refers to how much a society can produce with its resources.Equality refers to how evenly the benefits from using resources are distributed among members of society.
• D)refers to how evenly the benefits from using resources are distributed between members of society.Equality refers to how much a society can produce with its resources.

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Definitions:

Reward-To-Risk Ratio

A measure used in finance to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield of government bonds from stable governments.

Market Risk Premium

This is the extra return expected by investors for holding a risky market portfolio instead of risk-free assets.

Security Market Line

A line that represents the risk versus expected return of the market; used to assess the performance of investments compared to the market.