Table 3-2 -Refer to Table 3-2.What Does Each Producer Have an Absolute

question 185

Multiple Choice

Table 3-2

-Refer to Table 3-2.What does each producer have an absolute advantage in?

• A)The farmer has an absolute advantage in meat, and the rancher has an absolute advantage in potatoes.
• B)The farmer has an absolute advantage in potatoes, and the rancher has an absolute advantage in meat.
• C)The farmer has an absolute advantage in neither good, and the rancher has an absolute advantage in both goods.
• D)The farmer has an absolute advantage in potatoes, and the rancher has an absolute advantage in neither good.

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Definitions:

Abnormal Return

A return on an investment that deviates from the expected normal or benchmark return.

Bogey Portfolio

A benchmark portfolio against which the performance of an investment portfolio can be measured, often used in fund management.

Sharpe's Measure

A metric used to evaluate the risk-adjusted return of an investment portfolio.

Residual Standard Deviation

A statistical measure that quantifies the amount by which an outcome differs from the prediction of a model.