Suppose you have an asset with a return that rises as GDP increases.How will the asset's return be affected if the government announces that GDP is unexpectedly higher than was previously thought?
A)The return will increase.
B)The return will remain unchanged.
C)The return will decrease.
D)It is undetermined and more information is needed.

Question

Quizplus · Accepted Answer

If the asset's return is positively correlated with GDP, then an unexpected increase in GDP would lead to an increase in the asset's return. Therefore, the best choice is A.

Suppose You Have an Asset with a Return That Rises