A Process in Which a Security's Return Is Assumed to Be

question 5

Multiple Choice

A process in which a security's return is assumed to be related to a market return is

• A) the development of the riskfree borrowing rate.
• B) the efficient set.
• C) the tangency to the efficient set.
• D) a return-generating process.

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Definitions:

Inflation

An increase in the economy’s average price level.

Expansion

Expansion refers to the phase in the economic cycle where an economy is growing and experiencing increasing levels of output, employment, and income.

Actual Output

The actual quantity of goods and services produced in an economy over a specific period.

Demand

The desire and ability of consumers to purchase goods and services at given prices.