Use the Table for the Question(s)below

question 1

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns,volatilities,and correlations:

-The volatility of a portfolio that is equally invested in Wal-Mart and Duke Energy is closest to:

• A)5.0%
• B)0.6%
• C)7.6%
• D)22.4%
• E)10.1%

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Definitions:

Labor-Intensive Commodities

Goods that require a higher proportion of labor in their production process compared to materials and capital.

Opportunity Cost

The value of the best alternative that must be forgone as a result of choosing a particular action or decision.

Law of Comparative Advantage

An economic principle stating that countries or individuals gain when they produce goods and services for which they have lower opportunity costs relative to others.

Low Opportunity Cost

A situation where the cost of forgoing the next best alternative is relatively minimal.