A decrease in the perceived riskiness of Company A stock ________ the risk premium investors require to purchase Company A stock and ________ the price of Company A stock.
A. increases; increases
B. decreases; decreases
C. decreases; increases
D. increases; decreases
Answer: C
You might also like to view...
Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for used cars, which are inferior goods. An increase in income would be represented by a shift from
A) Demand 1 to Demand 2. B) Demand 2 to Demand 1. C) Supply 1 to Supply 2. D) Supply 2 to Supply 1.
Explain the difference between the marginal rate of substitution and the marginal rate of transformation
What will be an ideal response?
One explanation for the growth in the U.S. economy over the last 100 years is:
A. a large increase in human capital. B. a rapid decline in human capital. C. a small, incremental increase in human capital. D. Human capital was not the cause of growth in the United States over the last 100 years.
Which case below best represents a case of third-degree price discrimination?
A. A professional baseball team pays two players with identical batting averages different salaries. B. A utility company charges less for electricity used during "off-peak" hours, when it does not have to operate its less-efficient generating plants. C. An insurance company offers discounts to safe drivers. D. A major airline sells tickets to senior citizens at lower prices than to other passengers.