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According to Liquidity Preference Theory,if the Quantity of Money Demanded

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According to liquidity preference theory,if the quantity of money demanded is greater than the quantity supplied,then the interest rate will


Definitions:

Diversification Benefits

The advantages gained by investing in a variety of assets to reduce risk in a portfolio.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Minimum-Variance Portfolio

An investment portfolio designed to achieve the lowest possible risk level for its expected rate of return.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, commonly used to quantify the risk of a financial instrument.

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