Why does diversification fail to reduce risk when the returns of the two investments purchased are perfectly positively correlated?
What will be an ideal response?
If two returns are perfectly positively correlated, then what happens to one in terms of rising or falling will happen to the other.
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The United States' comparative advantage over Japan in the production of rock-n-roll music implies that (for a similar quality of music) the
A) opportunity cost of production is less in Japan. B) absolute cost of production is less in the United States. C) absolute cost of production is less in Japan. D) opportunity cost of production is less in the United States. E) None of the above.
Draw and explain a Lorenz curve
What will be an ideal response?
Bond prices and interest rates are directly related
a. True b. False Indicate whether the statement is true or false
_____ gives the slope of an isocost line where labor (L) and capital (K) are the two inputs measured on the X and Y axes respectively
a. The ratio of the marginal product of capital to the marginal product of labor, with a negative sign, b. The ratio of price of labor to the price of capital, with a negative sign, c. The ratio of the price of capital to the price of labor d. The ratio of the marginal product of labor to the marginal product of capital