Explain why a riskier asset offers a higher expected return.
What will be an ideal response?
Due to the higher risk, savers will require a risk premium be added to the risk free return in order to entice the asset.
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From 1980 to 1987
a. foreigners were buying more assets from the United States than Americans were buying abroad. The United States was going into debt. b. Americans were buying more assets abroad than foreigners were buying from the United States. The United States was going into debt. c. foreigners were buying more assets from the United States than Americans were buying abroad. The United States was moving into surplus. d. Americans were buying more assets abroad than foreigners were buying from the United States. The United States was moving into surplus.
Which of the following is a typical example of a firm in a constant-cost industry?
a. Even though Snappy, Inc. increases its demand for rubber, the market price for rubber is unaffected. b. When TRN, Inc increases its demand for aluminum, the market price for aluminum rises. c. After RV Sports exits a market, the market wage for unskilled labor drops. d. QuickEats, a fast-food chain, shuts down, causing the market price for beef to drop.
Private property provides an incentive to
A. save, but it fails to provide an incentive to work. B. both work and save. C. neither work nor save. D. work, but it fails to provide an incentive to save.
For a perfectly competitive palm tree nursery in South Carolina, the total revenue curve is
A) downward sloping. B) a horizontal line. C) upward sloping. D) U-shaped. E) undefined because the firm is perfectly competitive.