Table 132 Sarita and Gabriel Own S&G Bakery

question 5

Multiple Choice

Table 13.2 Sarita and Gabriel own S&G Bakery.Table 13.2 lists the number of pies and cakes Sarita and Gabriel can each bake in one day.
-Refer to Table 13.2.Select the statement that accurately interprets the data in the table.

• A)Sarita has a comparative advantage in baking pies.
• B)Gabriel has a comparative advantage in baking cakes.
• C)Sarita has a comparative advantage in baking pies and baking cakes.
• D)Sarita has a comparative advantage in baking cakes.

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Definitions:

Volatility

Volatility is a statistical measure of the dispersion of returns for a given security or market index, indicating the degree of variation from the average over a certain period.

CAPM

The Capital Asset Pricing Model is a formula used to determine the expected return on an investment, factoring in its risk compared to the market.

Required Return

The smallest yearly percentage gain from an investment necessary to entice people or corporations to invest in a certain security or endeavor.

Risk Aversion

The tendency of investors to prefer lower risk or safer investments to avoid potential losses.