As the Use of DVDs Becomes More Widespread, We Would

question 172

Multiple Choice

As the use of DVDs becomes more widespread, we would expect all of the following except one.Which is the exception?

• A)The prices of CDs will decrease.
• B)The demand curve for CD players will shift leftward.
• C)The supply curve of CD players will shift rightward.
• D)The demand curve for CDs will shift leftward.
• E)Firms will move their resources away from CD production to DVD production.

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Definitions:

Risk Premium

The extra return expected by an investor for holding a risky asset over a risk-free asset.

Expected Rate

An anticipated return or interest rate forecasted for an investment over a specific period.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, suggesting that the expected return on an investment is related to its risk level.

Portfolio Variance

A measure of the dispersion of returns of a portfolio from its mean, indicating the level of investment risk.