Security A has a higher standard deviation of returns than security B. We would expect that: I. Security A would have a risk premium equal to security B. II. The likely range of returns for security A in any given year would be higher than the likely range of returns for security B. III. The Sharpe ratio of A will be higher than the Sharpe ratio of B. Multiple Choice A. I only B. I and II only C. II and III onlyD. I, II and III

B. I and II only

Explanation:

Assumption: Apparently there is an error in the question and option 1 has been read as, "Security A would have a higher risk premium than Security B", only then answer I and II only can be selected.

Standard deviation of a security is a measure of security risk. If a security has a higher standard deviation, it means the risk is high.

A security that has more risk would have a greater risk premium to compensate for the extra risk assumed.

Sharpe ratio denotes excess return per unit of total risk i.e standard deviation.

In the given case, security A has a higher standard deviation than security B. This means that Security A would have a higher risk premium than Security B and also since the variation of returns is high (since standard deviation is high), the range of returns for Security A in any given year would be higher than the likely range of returns for Security B.

a. $48.75

is the answer to your question

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.