Answer: Option B
Explanation: In simple words, diversification refers to the process of allocating capital in different investments to reduce the overall risk of the investment portfolio.
Therefore, analyst tries to make portfolio in such a way that securities will be negatively correlated. If two securities are negatively correlated then the decrease of one will lead to proportionate increase of others.
This ensures that the investors money will not be depreciated but at the same time the potential for abnormal returns also decreases.
Answer: $57
Explanation:
Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.
If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.
Opportunity cost of going to the theater:
Earning at work = $9 per hour × 3 hours
= $27
Theater ticket cost = $30
Therefore, total opportunity cost of going to the theater is as follows;
= Earning at work + Theater ticket cost
= $27 + $30
= $57
Answer:
a decrease in market output and an increase in the price of the product.
Explanation:
Due to scarcity. There exist unlimited wants but only scarce amount of resources to meet those wants so items must be allocated through a system of prices or through exchange.
LeBron James is one of the best basketball players in the country, was selected by the Cleveland Cavaliers as the first pick in the 2003 NBA draft, signing a three-year contract worth almost $13 million, with an option for a fourth year at $5.8 million. Had he decided to attend college instead, James would have incurred an opportunity cost of at least $19 million in forgone income to earn a four-year college degree.
Opportunity cost is the value you would gain or lose if you choose a different path or solution. The opportunity cost in this scenario is deciding to play in the NBA since college was too expensive. LeBron James ultimately saved time and money by taking the detour because he received a contract worth close to $13 million; otherwise, he would have had to pay more and spend more time attending a four-year college.
LeBron's decision to join the NBA right after high school graduation has an opportunity cost because he might have attended a four-year university or college instead. He was chosen by the Cleveland Cavaliers as the first overall choice in the 2003 NBA Draft
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