The Following Information Was Given Regarding a Proposed Project at Field

question 56

Multiple Choice

The following information was given regarding a proposed project at Field Corp. (FC) .
$\begin{array}{|c|r|}\hline \text { Probability (S) } & \text { Poticutial Profir (S) } \\\hline 40\% & \$ 10,000 \\\hline 25\% & \$ 15,000 \\\hline 50\% & (\$ 20,000) \\\hline 30\%& \$ 5,000 \\\hline\end{array}$
-The W Equity portfolio has a standard deviation of returns of 8.The R Bond portfolio has a standard deviation of returns of 6.If the Cov of these portfolio is 5 what is this portfolio's coefficient of correlation?

• A) 0.1042
• B) 0.889
• C) 0.43
• D) -0.1042

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Definitions:

Long Run Average Cost Curve

A graphical representation showing the lowest cost at which a firm can produce any given level of output in the long run, where all inputs are variable.

Decreasing Returns to Scale

A situation in which, as the scale of production increases, the output increases at a proportionally smaller rate, leading to increased average costs.

Long Run Average Cost Curve

A graphical representation showing the minimum average cost at which any output level can be produced in the long term when all inputs, including capital, are variable.

Increasing Returns to Scale

A situation in which a proportionate increase in all inputs leads to a greater proportional increase in output, indicating improved production efficiency.