An Asset Had Returns of 7

question 76

Multiple Choice

An asset had returns of 7.7, 5.4, 3.6, −4.2, and −1.3 percent, respectively, over the past five years. What is the variance of these returns?

• A).00173
• B).00184
• C).00216
• D).00239
• E).00259

Comprehend and apply the concept of the Lagrange multiplier in the context of constrained optimization problems.

Understand the Hicksian substitution effect and its implications on consumer choice.

Identify the mathematical techniques used in solving constrained optimization problems.

Explain the conditions under which a consumer is maximizing utility.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales over a certain period, such as rent or salaries.

Output

The amount of goods or services produced by a person, machine, or industry.

Marginal Product

Marginal product refers to the additional output generated by employing one more unit of a specific factor of production, holding all other factors constant.

Labor

The exertion of mental or physical strength by humans to create goods and services.