Refer to the graph. If a financial asset's average expected rate of return and beta put it at point F:
A. arbitrage will push down the price of the asset and lower the average expected rate of
return to Y.
B. arbitrage will push up the price of the asset and lower the average expected rate of return to Y.
C. a restrictive monetary policy is needed to move the asset onto the Security Market Line.
D. an expansionary monetary policy is needed to move the asset onto the Security Market
Line.
B. arbitrage will push up the price of the asset and lower the average expected rate of return to Y.
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Figure 5-6
A shift in the budget line in Figure 5-6 from AB to AC indicates
A. the price of wine coolers has risen. B. income has increased. C. the price of beer has fallen. D. the price of wine coolers has fallen. E. All of the responses are correct.
An increase in the expected profitability of investment will cause
A) IS to shift right. B) IS to shift left. C) MP to shift upward. D) MP to shift downward.
Economic agents can raise money capital by ________
A) issuing liabilities B) repaying a loan C) paying taxes D) providing a subsidy
The concept of inequality is different from that of poverty in that inequality
a. is measured by making comparisons. b. is limited to basic human needs. c. is much easier to identify and track. d. is viewed in absolute terms.