Refer to the graph. Each labeled point represents a different asset. For which of these assets would we not expect arbitrage to change the average expected rate of return:
A. E only.
B. D, E, and F.
C. E, G, and H.
D. D, E, F, G, and H.
C. E, G, and H.
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The MRTS is currently -2. The wage rate is $15 per hour and the rental rate is $30 per hour. It follows that
a. the marginal product of capital is twice that of labor. b. the marginal product of labor is twice that of capital. c. the marginal product of capital is equal to that of labor. d. no statement about marginal productivity can be made without more information.
When there is a recessionary gap, capital and labor resources are:
A. decreasing in number. B. not being fully utilized. C. producing beyond their capacity. D. misallocated.
The trade-offs facing workers include all of the following EXCEPT:
A) decision to work or remain outside the workforce. B) decision to work or seek additional education. C) decision to work for a large corporation or a small firm. D) decision to allocate their time between work and leisure. E) All of the above are trade-offs facing workers.
What is the present value of a payment of $2,000 to be received two years from today if the interest rate is 5%?
a. $2205 b. $2200 c. $1818.18 d. $1814.06