Author Question: What is the difference between a price support and a price floor? A) A price support is below ... (Read 109 times)

iveyjurea · **on:** Jul 1, 2018

What is the difference between a price support and a price floor?

A) A price support is below equilibrium; a price floor is above it.
B) A price support is above equilibrium; a price floor is below it.
C) Government buys the excess supply to maintain a price floor, but not a price support.
D) Government buys the excess supply to maintain a price support, but not for a price floor.
E) There is no difference between the two.

Question 2

The standard deviation of a two-asset portfolio (with a risky and a non-risky asset) is equal to

A) the fraction invested in the risky asset times the standard deviation of the non-risky asset.
B) the fraction invested in the non-risky asset times the standard deviation of the risky asset.
C) the fraction invested in the risky asset times the standard deviation of that asset.
D) the fraction invested in the non-risky asset times the standard deviation of that asset.