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Econ 312 Exam 2 exam with complete solutions 2024_2025. $11.99   Add to cart

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Econ 312 Exam 2 exam with complete solutions 2024_2025.

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  • Econ312

Econ 312 Exam 2 exam with complete solutions 2024_2025.

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  • September 21, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Econ312
  • Econ312
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Econ 312 Exam 2 exam with complete
solutions 2024/2025




ceteris paribus - ANSWER-greek for the meaning "holing everything constant"

asset - ANSWER-any piece of property that carries value
ex:
-bonds
-stocks
-land
-houses

value in use - ANSWER-the usefulness of an asset

value in exchange - ANSWER-the price of an asset

-wealth
-expected returns
-risk
-liquidity - ANSWER-4 factors that determine the demand level for assets in
general:

wealth - ANSWER-total resources owned by an individual

increase the quantity demanded of assets - ANSWER-holding everything else
constant, an increase in wealth will..

decrease the quantity demanded of assets - ANSWER-holding everything else
constant, a decrease in wealth will..

expected returns - ANSWER-gains obtained due to holding as asset

, its expected returns relative to alternative assets increase - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..

its expected returns relative to alternative assets decrease - ANSWER-holding
everything else constant, the quantity demanded of an asset decreases when..

risk - ANSWER-the degree of uncertainty on returns

the asset has a lower risk relative to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..

the asset has a higher risk relative to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset decreases when..

liquidity - ANSWER-the ease with which an asset can be turned into cash

the asset is more liquid compared to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..

the asset is less liquid compared to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset decrease when..

-positively related to wealth
-positively related to expected returns relative to alternative assets
-negatively related to risk relative to alternative assets
-positively related to liquidity relative to alternative assets - ANSWER-the Theory
of Portfolio Choice
holding everything else constant, the quantity demanded of an asset is:

market - ANSWER-dynamic interaction between the buyers (demand) and the
sellers (supply) of a specific good

-the price of a good
-the quantity of the good traded in the market - ANSWER-studying markets is very
important because it helps us understand changes in:

bond prices and interest rates - ANSWER-there is an inverse relationship
between..

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