For Two Investments with a Correlation Coefficient (Rij) Less Than

question 11

Multiple Choice

For two investments with a correlation coefficient (rij) less than +1, the portfolio standard deviation will be __________ the weighted average of the individual investments' standard deviation.

• A)more than
• B)less than
• C)equal to
• D)zero compared to

Understand the relationship between input costs, output prices, and profit maximization.

Apply production functions to calculate optimal levels of inputs for profit maximization.

Determine the optimal mixture of multiple inputs based on their relative costs and production function.

Calculate the effect of changes in input and output prices on profit-maximizing input levels.

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Definitions:

Average Tax Rate

The proportion of total income that is paid as taxes, calculated by dividing the total taxes paid by the total income.

Alcohol Tax

A special tax imposed on alcoholic beverages to generate revenue and/or discourage excessive consumption owing to health or social reasons.

Compliance Costs

Expenses incurred by businesses or individuals to adhere to laws, regulations, and standards.

U.S. Income Tax

A tax imposed by the U.S. government on the income earned by individuals, corporations, estates, and other entities.