Answer:
a. The portfolio weights that remove all risk is 50%
.
b. The risk-free rate of interest in this economy is 13.5%
Explanation:
The formula for standard deviation of a portfolio, of which i cannot type:
a. If we let sigma p = std. deviation of portfolio
rho 1,2 = correlation
if sigma = 0 and rho = -1, then the first equation can be re-written as :
0 = w1^2 * s1^2 + w2^2 * s2^2 + 2 * w1 * w2 * s1 * s2 * -1
0 = (w1s1 - w2s2)^2
w1s1 = w2s2
w1 * 0.03 = w2 * 0.03
w1 = w2 = 50%
Therefore, The portfolio weights that remove all risk is 50%
.
b. Expected return of the portfolio = 0.5*20% + 0.5*7%
= 13.5%
This portfolio has zero risk, risk free rate = 13.5%
Therefore, The risk-free rate of interest in this economy is 13.5%
<em><u>a</u></em><em><u>m</u></em><em><u>m</u></em><em><u>i</u></em><em><u> </u></em><em><u>s</u></em><em><u> </u></em><em><u>f</u></em><em><u>a</u></em><em><u>v</u></em><em><u>o</u></em><em><u>r</u></em><em><u>i</u></em><em><u>t</u></em><em><u>e</u></em><em><u> </u></em><em><u>s</u></em><em><u>p</u></em><em><u>o</u></em><em><u>r</u></em><em><u>t</u></em><em><u> </u></em><em><u>i</u></em><em><u>s</u></em>
<em><u>a</u></em><em><u>_</u></em>
In one unit of time, that country cannot produce more of any product than the competing country.
Let Country 1 (C1) produce either 1 of product X or 1 of product Y in 1 day.
Let Country 2 (C2) produce either 2 or product X or 2 of product Y in 1 day.
C1 has the absolute disadvantage in both products because it cannot produce more than C2 in either product at the end of the day.
Answer: (B). raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.
Explanation: When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.
Answer:
the first one
Explanation:
its dangerous and against the law to text and drive
