The More Positive the Slope Is for a Security's Market

question 36

Multiple Choice

The more positive the slope is for a security's market model,

• A) the more defensive the security.
• B) the lower the risk-free return.
• C) the more sensitive the security's return is to that in the market.
• D) the more the market return can change without affecting the security return.

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Definitions:

Rightward Shift

A movement to the right on a graph, indicating an increase in quantity supplied or demanded at a given price.

Subsidy

Payment reducing the buyer’s price below the seller’s price; i.e., a negative tax.

Labor Market

The labor market is the arena in which employers seek to hire labor and workers seek employment, and where wage rates are determined by supply and demand for labor.

Monopsonist

A market condition where a single buyer substantially controls the market as the major purchaser of goods and services.