Answer:
Competitive supply market, substitution is possible, price per unit is important.
Explanation:
A portfolio variance is used to determine the overall risk or dispersion of returns of a portfolio and it is the square of the standard deviation associated with the particular portfolio.
The portfolio variance is given by the equation;
[tex]Variance = w^{2}_{1} d^{2}_{1} + w^{2}_{2} d^{2}_{2}+2w_{1}w_{2}C_{OV_{1, 2}}[/tex]
Where;
[tex]w_{n}[/tex] = the weight of the nth security.
[tex]d^{2}_{n}[/tex] = the variance of the nth security.
[tex]C_{OV_{1, 2}}[/tex] = the covariance of the two security.
In the portfolio matrix, characteristics of goods and services in the leverage quadrant are competitive supply market, substitution is possible, price per unit is important. Thus, the leverage quadrant represents a significant part of expenditures and are really important for a business.
