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Use the table for the question(s) below.
Consider the following covariances between securities:
-The variance on a portfolio that is made up of a $6000 investments in Duke Energy and a $4000 investment in Wal-Mart stock is closest to:
Potential Output
The economy’s maximum sustainable output, given the supply of resources, technology, and rules of the game; the output level when there are no surprises about the price level.
Natural Rate
The natural rate refers to the long-term unemployment rate that an economy experiences under normal conditions, unaffected by short-term cyclical fluctuations.
Full-Employment
A scenario where an economy utilizes all accessible labor resources in the most optimized manner.
Potential Output
Represents the highest level of real Gross Domestic Product (GDP) that can be sustained over the long term without increasing the rate of inflation.
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