Select the correct answer.
which statement is true?
a.
savings are a leakage in the circular flow of income.
b.
households pay wages to businesses.
c.
exports are leakages in the circular flow of income.
d.
taxes paid to the government have no direct effect on the economy.

An investment offers a total return of 18 percent over the coming year. janice yellen thinks the total real return on this investment will be only 14 percent. what does janice believe the inflation rate will be over the next year?

Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable

Stock a has a beta of 1.2 and a standard deviation of 20%. stock b has a beta of 0.8 and a standard deviation of 25%. portfolio p has $200,000 consisting of $100,000 invested in stock a and $100,000 in stock b. which of the following statements is correct? (assume that the stocks are in equilibrium.) (a) stock b has a higher required rate of return than stock a. (b) portfolio p has a standard deviation of 22.5%. (c) portfolio p has a beta equal to 1.0. (d) more information is needed to determine the portfolio's beta. (e) stock a's returns are less highly correlated with the returns on most other stocks than are b's returns.