You Have a Portfolio Which Is Comprised of 72 Percent

question 50

Multiple Choice

You have a portfolio which is comprised of 72 percent of stock A and 28 percent of stock B. What is the variance of this portfolio?

• A) 190.9
• B) 203.8
• C) 268.0
• D) 290.8
• E) 315.6

Understand the concepts of income effect, substitution effect, and wealth effect in the context of consumer choice theory.

Be able to interpret and analyze shifts in demand curves resulting from changes in prices, incomes, or other factors.

Ability to construct and interpret Engel curves for different types of goods based on consumer income and quantity demanded.

Comprehend the implications of goods being classified as normal goods or inferior goods on consumer purchasing behavior.

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Definitions:

Nonrival

A characteristic of goods where one person's consumption does not diminish the ability of others to consume the same good.

Social Costs

The total cost to society, including both the private costs borne by producers and also any external costs to others not involved in the transaction.

Social Benefits

The aggregate advantage to society derived from the production or consumption of a product, encompassing both individual benefits and any additional external advantages.

Pay-per-view Movies

A service that allows consumers to pay for individual movies to watch rather than subscribing to a broad service offering.