Answer:
B. Capital market
Explanation:
A capital market is the market for buying and selling long term debts or equity . It is a market for long term borrowing and lending of capital funds. A capital market usually deals in shares, bonds, and other long-term investment. It connects investors and borrowers of long term capital.
A capital market is divided in two parts
- primary market
- secondary market
- The primary market is the market where new shares and bonds are sold by investors While the secondary market is where already existing securities are sold.
Answer:
The stock’s beta is 0.90
Is not reasonable to expect that the volatility of the market portfolio’s future expected returns will be greater than the volatility of stock A’s returns
Explanation:
In order to calculate the stock’s beta we would have to calculate the following formula:
Beta of stock = (standard deviation of stock A x correlation between stock A and market) / standard deviation of market
beta = (30% x 0.3) / 10% = 0.90
The market is assumed to have a beta of 0.90 and beta of a stock is the volatility of the stock in relation to the market. Since, stock A has beta equal to the market, its volatility will be correlated with the market. Therefore is not reasonable to expect that the volatility of the market portfolio’s future expected returns will be greater than the volatility of stock A’s returns
Answer:
The correct option is C,will result in the consumer buying less of a good at a higher price
Explanation:
When there are close substitutes for a product,a rational consumer will switch to an alternative good or service when the price of the good rises.
This ultimately is line with the law of the demand that the higher price the lower the quantity demanded and vice versa.
Hence, the substitution effect works in such a way that the product that has a lower price compared to its rival commodities catches the attention of the consumers much more due to its lower price nature.