chap 17 - Arbitragecausesanequalizationofthe_

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Arbitrage causes an equalization of the _________  when assets are identical or nearly identical.    Student Response Value Correct Answer A.  levels of risk of assets 0%     B.  rates of return of assets    C.  time when payments are made  from assets    D.  prices of assets    Score: 0/1    2.   Bobbie is contemplating buying a lottery ticket for $1 that has a 1 percent chance of paying $100. What is  Bobbie's average expected rate of return on this "investment?"    Score: 0/1    3.   The average expected rate of return on most financial assets is the sum of the rates that compensate for: 
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  Score: 0/1    4.        Refer to the graph above. Which of the three Security Market Lines would represent a situation where investors  do not care about the risk level of a financial asset?    Score: 0/1    5.   Pigou buys a house for $500,000, rents it for $2000 per month for 4 years, then sells it for $600,000. What is  Pigou's per year rate of return?   
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  Score: 1/1    6.   Another name for diversifiable risk is:    Score: 1/1    7.   The process of arbitrage:    Score: 1/1 
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  8.  
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chap 17 - Arbitragecausesanequalizationofthe_

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