The Data in the Table Below Assumes That with the Same

question 89

Multiple Choice

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers.Australia can make 1, 000 computers or 2, 000 units of food in a day, and the Philippines can make 200 computers or 1, 200 units of food in a day. Table 20.2 According to Table 20.2, Australia has:

• A)a comparative disadvantage in the production of both food and computers.
• B)a comparative advantage in the production of computers.
• C)a comparative disadvantage in the production of computers.
• D)a comparative advantage in the production of food.
• E)a comparative advantage in the production of both food and computers.

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Definitions:

Multifactor CAPM

An extension of the Capital Asset Pricing Model (CAPM) that incorporates multiple factors in the assessment of risk and expected return of an asset, beyond just the market risk.

Hedge Portfolios

Investment strategies designed to reduce or mitigate risk in an investment portfolio by making counterbalancing investments, often involving derivatives.

Risk Factors

Elements or conditions that may potentially result in a negative impact on the performance or value of an investment.

APT

Stands for Arbitrage Pricing Theory, a financial model that determines asset prices based on the relationship between expected risk and expected return.