The Consumer Price Index

question 173

Multiple Choice

The consumer price index:

• A)uses a fixed market basket set in the base year for all subsequent years.
• B)is also called the GDP price index.
• C)measures changes in the prices of a market basket of some 50,000 goods and services.
• D)is adjusted annually for changes in consumer spending patterns.

Understand the basic concepts of the Capital Asset Pricing Model (CAPM) including systematic risk, beta, and alpha.

Calculate expected returns using the CAPM formula and other financial models.

Analyze the effects of macroeconomic factors on stock returns using multi-factor models.

Identify arbitrage opportunities and understand the principles of arbitrage pricing theory.

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Definitions:

Brain Waves

Patterns of electrical activity in the brain, measurable by electroencephalography (EEG), that reflect different states of consciousness.

Psychoanalytic Theory

A framework for understanding the mind and mental disorders based on the interplay of unconscious and conscious forces.

Empirical Support

Evidence that is based on observation or experience rather than theory or pure logic.

Cognitive

Relating to cognition, involving the processes of thinking, understanding, learning, and remembering.