If the Utility Function (U)between Bananas (B)and Jam (J)can Be

question 9

Multiple Choice

If the utility function (U) between bananas (B) and jam (J) can be represented as U(B,J) = 3ln(B) +4ln(J) ,what is the marginal rate of substitution (MRS) between bananas and jam?

• A) 4B.
• B) -3J/(4B).
• C) 4/(3J).
• D) 3B/J.

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Definitions:

Overpriced

A term describing an asset whose market price is considered higher than its intrinsic value.

Underpriced

Describes securities or assets that are selling for a price believed to be below their intrinsic or true value.

Expected Rate

The anticipated return on an investment under normal circumstances, often estimated based on historical data and analysis.

Capital Asset Pricing Model

A framework that explains the connection between inherent risk and anticipated return on investments, especially in the context of equities.