Use the Information for the Question(s)below

question 7

Multiple Choice

Use the information for the question(s) below.
Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share,200 shares of Lowes (LOW) at $30 per share,and 100 shares of Ball Corporation (BLL) at $40 per share.
-Which of the following equations is INCORRECT?

• A)Cov(R_i,R_j)= Σ(R_i - R_i)(R_j - R_j)
• B)Var(R_p)= x₁^2Var(R₁)+ x₂^2Var(R₂)+ 2X₁X₂Cov(R₁,R₂)
• C)Corr(R_i,R_j)=
• D)Cov(R_i,R_j)= E[(R_i - E[R_i])(R_j - E[R_j])]

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Definitions:

Efficient Level

The point at which an entity is operating at maximum productivity with the least waste of resources.

Producing Firm's Spillovers

External effects that a company's actions have on other parties or the economy without financial compensation.

Full Costs

The total costs associated with the production of goods or services, including both fixed and variable costs.

External Costs

Costs incurred by third parties who are not directly involved in a transaction or economic activity, such as environmental pollution affecting the community.