You purchased two stocks that are perfectly negatively correlated
A) Your portfolio is well diversified, so you should face no risk whatsoever.
B) Even though you diversified the idiosyncratic risk away, your portfolio is still affected by systemic risks like a stock market crash.
C) Even though you diversified the systemic risk away, your portfolio is still affected by idiosyncratic risks like a stock market crash.
D) Your portfolio is not diversified; thus you face no systemic risk.
B
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What is a utility possibility frontier?
What would you pay for a newly issued 10-year bond with face value of $10,000 and no coupon payments? Assume the interest rate is 5 percent (0.05) per year
a. $0 b. $6,139.13 c. $10,000 d. $95,632.41 e. $100,000.00
When the price of a product rises, the increase in quantity supplied will generally be greater in the long run than the short run because
a. producers maximize short-run, not long-run, profits. b. over time, new firms will enter the industry and old firms will expand their operations in response to the price increase. c. consumers are less resistant to higher prices in the long run than in the short run because they have fewer options in the long run. d. consumer income will expand in the long run, causing resource prices to rise, which will induce producers to increase output.
The demand for desserts tends to be more inelastic than the demand for red velvet cake
a. True b. False Indicate whether the statement is true or false