Answer:
I messaged you the asnwer.
Explanation:
Answer: C. use 0.8 fewer units of capital.
Explanation:
The Marginal Rate of Technical Substitution (MRTS) shows how much you can decrease capital or labor by in order to keep production constant if you increase either capital or labor.
It is calculated by the formula:
= Marginal product of labor / Marginal product of capital
= 4 / 5
= 0.8
<em>The firm should use 0.8 fewer units of capital in order to maintain the same production level. </em>
Answer:
= 7.678%
Explanation:
Data provided
Risk free rate = 6.5%
Beta = 0.31
Marker return rate = 10.3%
Risk free rate = 6.5%
The computation of expected return is shown below:-
Expected return = Risk free rate + Beta × (Marker return rate - Risk free rate)
= 6.5% + 0.31 × (10.3% - 6.5%)
= 6.5% + 0.31 × (3.8%)
= 6.5% + 1.178%
= 7.678%
