Use the Following Table to Answer the Question : Table

question 61

Multiple Choice

Use the following table to answer the question : Table 14-2 : represents the payoff matrix of firms A and B,when they choose to produce low or high output.In each cell,the figure on the left indicates Firm B's payoffs and the figure on the right indicates Firm A's payoffs.

-Refer to Table 14-2.Which of the following statements about the two firms must be true?

• A)If Firm B produces low output,Firm A will also produce low output.
• B)If Firm B produces high output,Firm A will produce low output.
• C)If Firm A produces high output,Firm B will also produce high output.
• D)If Firm A produces low output,Firm B will produce high output.

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Definitions:

Market Risk Premium

The bonus yield an investor projects to receive by placing their money in a risky market portfolio instead of in assets that carry no risk.

Market Rate

The prevailing interest rate available in the marketplace.

Individual Security

A particular financial instrument such as a stock or bond representing an ownership or creditor relationship with a corporation or governmental entity.

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio of investments compared to the market as a whole.