If Pacific Power and Light Increased Its Rates by 10

question 12

Multiple Choice

If Pacific Power and Light increased its rates by 10 percent and experienced a 2 percent reduction in the demand for power, the demand would be

• A)elastic.
• B)minimal.
• C)minor elasticity.
• D)variable.
• E)inelastic.

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Definitions:

Markowitz Efficient Frontier

A graphical representation of the most efficient portfolios that provide the best possible return for a given level of risk.

Standard Deviation of Returns

A measure of the volatility of the returns on an investment, indicating the typical deviation from the average return.

Specific Risk

Specific risk is a type of risk that affects a very small number of assets, also known as unsystematic risk, and is associated with factors unique to a particular company or industry.

Beta

A metric that measures the volatility of an investment relative to the overall market, indicating its level of risk.