D. One-half of the nondiversifiable risk of the asset with a beta of 1.5
A. 0
B. 1.0
C. 100
D. Any value
B. 1.0
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The Fed uses a "core" price index, one that excludes food and energy prices to measure inflation. It does so because
A) food and energy have inelastic demand curves and consumers will buy them regardless of their price. B) food and energy prices have wide swings that are not related to the causes of general inflation. C) food and energy prices do not change all that much during the short run, so are irrelevant to the calculation of inflation. D) it wants to avoid the blame for high gasoline prices causing inflation.
A provision of the Dodd-Frank Act of 2010 revised the Federal Reserve Act to
A) restrict the Fed's ability to make loans except to commercial banks. B) allow the Fed to buy commercial paper issued by nonfinancial firms. C) allow the Fed to make loans to investment banks. D) allow the Fed to make loans to any individual, partnership, or corporation in unusual and exigent circumstances.
If the government increases spending but does not raise taxes
A) aggregate demand will increase without any effect on the price level. B) borrowing by the government will take place. C) the government will have to sell some assets, such as oil and national parks. D) the government will have to either lower expenditures or raise taxes the next year.
Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?
a. Unemployment rate falls from 7.5 percent to 7.3 percent. b. Real GDP falls by 0.4 percent in the third quarter. c. Inflation was 2.4 percent last year. d. The price of gasoline rises due to rising oil prices.