Question

What is the concept of the "risk-free" asset in economic theory?

a.

An asset with the highest possible return

b.

An asset that is completely immune to market fluctuations

c.

An asset that offers a certain return free from all risk of default

d.

An asset that guarantees a fixed rate of return

Answer: (c).An asset that offers a certain return free from all risk of default Explanation:In economic theory, the "risk-free" asset refers to an asset that offers a certain return free from all risk of default, providing investors with a stable investment option.

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Q. What is the concept of the "risk-free" asset in economic theory?

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