The Behavior of Interest Rates - Determinants of Asset Demand - Risk
3 important questions on The Behavior of Interest Rates - Determinants of Asset Demand - Risk
What is a risk?
The degree of uncertainty associated with the return on one asset relative to alternative assets
What are risk-avers people?
People that prefer the sure investment, less risky asset.
What happens to an asset's risk that rises relative to that of an alternative asset? (holding everything constant)
It's quantity demanded will fall
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