If the Returns for Two Assets Have a Correlation Coefficient

question 71

True/False

If the returns for two assets have a correlation coefficient of one, then there are no benefits of diversification by combining these assets in a two-asset portfolio.

Distinguish between total utility and marginal utility and their respective roles in consumer decision-making.

Explain the law of diminishing marginal utility and its connection to the demand curve.

Identify the conditions under which a consumer maximizes utility given budget constraints and indifference curve analysis.

Illustrate the assumptions underlying the theory of consumer behavior.

---

Definitions:

Code Of Ethics

A set of principles designed to guide members of a profession, organization, or group in conducting their actions with honesty and integrity.

Public Companies

Corporations whose shares are traded openly on stock exchanges, allowing public investors to buy and sell ownership stakes.

Deontological Theory

An ethical theory that suggests actions are morally right or wrong based on their adherence to rules and duties, regardless of the outcomes.

Utilitarian Notion

A concept in ethics that actions are right if they are useful or for the benefit of a majority, focusing on the outcome of achieving the greatest happiness for the greatest number.