Diversification can eliminate:
A. the systematic risk in a portfolio.
B. the idiosyncratic risk in a portfolio.
C. all risk in a portfolio.
D. risk only if the investor is risk averse.
Answer: B
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Which of the following is a reason why aggregate supply decreased following the housing bubble collapse?
A. Businesses could not access credit to carry out their daily operations. B. Consumption decreased. C. People stopped investing in homes. D. Government tax rates were altered as a response to change in aggregate output.
Each point on the demand curve indicates
a. the demand for the product. b. the quantity demanded at that price. c. the amount that people need. d. the amount people want to buy at different income levels.
Which of the following demonstrates the law of supply?
a. When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts. b. When car production technology improved, car producers increased their supply of cars. c. When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. d. When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.
In the standard model of a monopoly union bargaining with the firm, it is typically assumed that
A. union leadership disregards the preferences of the rank and file. B. the union's sole objective is to increase the wage. C. unions and management secretly negotiate on the behalf of stockholders. D. unions never lead to an efficiency loss. E. unions are willing to trade off some amount of employment for higher earnings.