Of the Following, Which Is the Least Likely to Be

question 195

Multiple Choice

Of the following, which is the least likely to be an example of substitute goods?

• A) beer and pretzels
• B) margarine and butter
• C) beef and chicken
• D) tea and coffee

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Definitions:

Risk Premium

The risk premium is the excess return that an investor requires for holding a risky asset over a risk-free asset, compensating for the risk of the investment.

Risk-free Rate

The theoretical rate of return on an investment with zero risk, often represented by government bonds.

Risk Premium

The extra return above the risk-free rate that investors demand for choosing to invest in a riskier asset.

Well-diversified Portfolio

An investment portfolio strategically crafted to include a variety of asset classes in order to minimize risk.