Table 2.2 -Krystal Runs a Nail Salon and Needs to Decide How

question 61

Multiple Choice

Table 2.2

-Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 2 hours per day. If she is following the marginal principle, what must her marginal benefit be?

• A) $6
• B) $12
• C) $15
• D) $18

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Definitions:

Capital Market Line

A line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk (standard deviation) for a particular portfolio.

Forecasted Return

The predicted financial return of an investment over a specific period, often based on historical data, current trends, and professional analysis.

Required Return

The minimum return that an investor expects to achieve on an investment to consider it a worthwhile risk.

Standard Deviation

A measure of the dispersion or variability in a set of values, often used to gauge the risk associated with a particular investment or portfolio.