How are the decisions of government policy makers, such as the Federal Reserve, related to risk and an individual investor's portfolio?
What will be an ideal response?
The decisions of government policy makers, such as the Federal Reserve, affect macroeconomic conditions, which in turn, affect the degree of systematic risk in the financial system. When the economy has low GDP growth and/or high inflation, this creates systematic risk that cannot be eliminated through diversification.
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The production-based method of national accounting sums up:
A) the total revenue earned by all the firms in the economy. B) the value that is added by each domestic firm in the production process. C) the income earned by each factor of production for participating in the production process. D) the expenditure incurred by domestic and foreign economic agents on domestic products. Infi Cor
If you liquidate $3,000 of your money market mutual fund and transfer the funds to your checking account, then initially, M1 will ________ and M2 will ________
A) not change; decrease B) increase; decrease C) increase; not change D) not change; not change
Survivor bias occurs when data used in a study reflects too broad a sample of the population.
Answer the following statement true (T) or false (F)
Zoran, a Croatian citizen, only works in the United States. The value added to production from his employment is:
A) included in Croatian GDP. B) included only in U.S. GDP. C) included only in U.S. GNP. D) not included in either U.S. GDP or U.S. GNP.