Exhibit 20-2 ​

question 7

Multiple Choice

Exhibit 20-2
​

-Refer to Exhibit 20-2. Total utility for the first four oranges is

• A)11 utils.
• B)60 utils.
• C)52 utils.
• D)15 utils.
• E)40 utils.

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Definitions:

Risk-Free

Pertaining to an investment with guaranteed returns and negligible risk of financial loss.

Economic Profits

Profits or losses calculated by considering both explicit costs, such as direct expenses, and implicit costs, like opportunity costs.

Arbitrage Opportunity

The opportunity to buy an asset at a low price in one market and sell it for a higher price in another, exploiting price discrepancies.

Investment Portfolio

Set of securities chosen by an investor.