3. if a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreas- ing returns to scale. if it causes output to increase by more than 10 percent, the production func- tion is said to exhibit increasing returns to scale. why might a production function exhibit decreasing or increasing returns to scale?

Stock a has a beta of 1.2 and a standard deviation of 20%. stock b has a beta of 0.8 and a standard deviation of 25%. portfolio p has $200,000 consisting of $100,000 invested in stock a and $100,000 in stock b. which of the following statements is correct? (assume that the stocks are in equilibrium.) (a) stock b has a higher required rate of return than stock a. (b) portfolio p has a standard deviation of 22.5%. (c) portfolio p has a beta equal to 1.0. (d) more information is needed to determine the portfolio's beta. (e) stock a's returns are less highly correlated with the returns on most other stocks than are b's returns.