Increases in the wage rates of coal miners and decreases in the price of natural gas would cause the price of coal to
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Increases in the wage rates of coal miners and decreases in the price of natural gas would cause the price of coal to
- rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal would fall.
- fall, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes.
- rise, but the equilibrium quantity of coal would fall.
- rise, but the equilibrium quantity of coal would rise or fall depending on the magnitude of the changes.
- rise, fall, or remain unchanged depending on the magnitude of the changes, but the equilibrium quantity of coal would increase.
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