Use the Following to Answer Questions

question 88

Multiple Choice

Use the following to answer questions :
-(Table: Wheat and Aluminum) Look at the table Wheat and Aluminum. The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Based on the table:

• A)the United States has a comparative advantage in wheat and an absolute advantage in wheat.
• B)Germany has an absolute advantage in aluminum and a comparative advantage in wheat.
• C)the United States has a comparative advantage in both aluminum and wheat.
• D)Germany has a comparative advantage in aluminum and an absolute advantage in aluminum.

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Definitions:

Beta

A rephrased definition: A statistical measure reflecting the relationship between the stock price movements of an individual company and those of the entire market.

Tobin's Separation Property

A principle in investment theory that suggests the investment decision can be separated from the financing decision, primarily developed by James Tobin.

Risk Aversion

The inclination to avoid taking risks, preferring safety over potential higher returns.

Optimal Risky Portfolio

A portfolio that offers the highest expected return for a given level of risk.