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A Portfolio Has a Variance of

question 54

Multiple Choice

A portfolio has a variance of .04050, a beta of 1.60, and an expected return of 18.9%. What is the Treynor ratio if the expected risk-free rate is 4.5%?

Understand how government budget deficits impact the open economy, including effects on real interest rates, domestic investment, and trade balance.

Comprehend the relationship between tax credits for investment and shifts in the demand for loanable funds and supply of dollars in the foreign-currency exchange market.

Recognize the effects of capital flight on demand for loanable funds, supply of dollars, and net capital outflows in the foreign-currency exchange market.

Analyze the impact of a government default on its debt on the country's real interest rates and currency valuation in the open-economy macroeconomic model.

Definitions:

Price Support Program

Government initiatives aimed at maintaining the market price of a commodity above its competitive equilibrium level.

Gasohol

A fuel mixture containing gasoline and ethanol, typically used in internal combustion engines.

Corn-Based Ethanol

Ethanol produced from corn, used as a biofuel additive for gasoline to reduce carbon emissions and reliance on fossil fuels.

Price-Inelastic

A characteristic of a good or service for which demand does not significantly change with a change in price, often essential or with few substitutes.