The new laws associated with health care reform dictate that 60-year-old patients cannot be charged more than ____ times as 25-year-old patients.
a. three
b. five
c. seven
d. ten
QUESTION 2Diversification of a portfolio leads to:
a. a negative correlation between the investments.
b. a lower mean of returns.
c. a lower variance of returns.
d. a higher standard deviation of returns.
QUESTION 3To understand the process of adding value, managers must understand only the costs of production.
Indicate whether the statement is true or false
QUESTION 4Prior to health care reform, young people would pay approximately ____ of the premium it would cost an elderly person.
a. 1/6
b. 1/2
c. 2/3
d. 4/5
QUESTION 5Which of the following properties can be associated with an indifference curve of a risk-averse investor?
a. Indifference curve for a risk-averse investor is a vertical line parallel to the variance axis.
b. Two indifference curves can intersect at the equilibrium combination of risk and return.
c. An indifference curve closer to the expected return axis gives a better utility than the one farther away.
d. Indifference curve for a risk-averse investor is always downward sloping.
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