Use the Information for the Question(s)below

question 82

Multiple Choice

Use the information for the question(s) below.
Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%.Monsters Inc.has a 24% volatility and a correlation with the market of .60,while California Gold Mining has a 32% volatility and a correlation with the market of -.7.Assume the CAPM assumptions hold.
-Suppose that Monsters' expected return is 12%.Then Monsters' alpha is closest to:

• A)-2.0%.
• B)-1.0%.
• C)1.0%.
• D)0.5%.

Grasp the concept of compensating differentials and its application in job selection and wage differences.

Analyze the arguments regarding compensation of nationally-prominent college athletes in terms of human capital investment.

Comprehend the reasons behind wage disparities such as education, skills, job responsibilities, and working conditions.

Recognize the role of consumers in perpetuating discrimination in labor markets.

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Definitions:

Increase

A situation where there is a rise in quantity, size, number, value, or intensity of a particular variable or condition.

Complementary Goods

Products or services that are used together, where the demand for one is increased when the price of the other decreases.

Demand Curve

An illustration that displays how the price of a product or service correlates with the amount people want to buy during a specific time frame.

Price

The amount in currency estimated, obligatory, or contributed as payment for something.