If Robin Has an Absolute Advantage in Both Gardening and Baking

question 58

Multiple Choice

If Robin has an absolute advantage in both gardening and baking when compared to Robert, then

• A)Robin cannot benefit by trading with Robert
• B)Robin can benefit by specializing in gardening if Robert specializes in baking
• C)Robin can benefit by specializing in baking if Robert specializes in gardening
• D)Robin and Robert may benefit from trading, but there is insufficient information to determine who should specialize in what
• E)neither Robin nor Robert can benefit from trading with the other

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Definitions:

Return to Risk Ratio

A financial metric that compares the amount of return gained on an investment to the level of risk taken in achieving that return.

S Index Fund

A type of mutual fund or exchange-traded fund (ETF) that replicates the performance of a specific benchmark index, often used for passive investing.

PHStat

An Excel add-in program that enhances the statistical analysis capabilities of Microsoft Excel, often used for educational purposes or in decision-making processes.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the individual values in a dataset deviate from the mean.