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Buying stocks in a n...View Answer
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A) lower than about 5.5 percent.
B) higher than about 5.5 percent.
C) lower than about 7.5 percent.
D) higher than about 7.5 percent.
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A) how society manages its scarce resources.
B) the implications of time and risk for allocating resources over time.
C) firms' decisions concerning how much to produce and what price to charge.
D) how society can reduce market risk.
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A) $100(1 + .0410)
B) $100(1 + .0410)
C) $100 * 10(1 + .04)
D) $100(1 + .04) 10
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A) $2,000/1.06
B) $1000/(1.06) 2
C) $1000/(1 + 0.062)
D) None of the above are correct.
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A) investment decreases when the interest rate increases,and it also helps explain why the quantity of loanable funds demanded decreases when the interest rate increases.
B) investment decreases when the interest rate increases,but it is of no help in explaining why the quantity of loanable funds demanded decreases when the interest rate increases.
C) the quantity of loanable funds demanded decreases when the interest rate increases,but it is of no help in explaining why investment decreases when the interest rate increases.
D) None of the above are correct;the concept of present value is of no help in explaining why either investment or the quantity of loanable funds demanded decreases when the interest rate increases.
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A) A risk averse person might be willing to hold stocks.
B) Other things the same,a portfolio with the stocks of a large number of companies has less risk.
C) Other things the same,the larger a portion of savings a person invests in stocks,the greater his expected return.
D) Diversification can eliminate market risk but not firm-specific risk.
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A) holds only stocks and bonds that are indexed to inflation.
B) holds all the stocks in a given stock index.
C) guarantees a return that follows the index of leading economic indicators.
D) typically has a lower return than a managed fund.
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A) $180
B) $181.82
C) $220
D) $222.22
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A) 2 percent
B) 4 percent
C) 6 percent
D) 8 percent
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A) she would be willing to accept a coin-flip bet that would result in her winning $300 if the result was "heads" or losing $300 if the result was "tails."
B) the pain of losing $300 of her wealth would equal the pleasure of adding $300 to her wealth.
C) the pain of losing $300 of her wealth would exceed the pleasure of adding $300 to her wealth.
D) the pleasure of adding $300 to her wealth would exceed the pain of losing $300 of her wealth.
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A) marginal utility diminishes as wealth rises,so he must be risk averse.
B) marginal utility diminishes as wealth rises,but we can't tell from this if he is risk averse.
C) marginal utility increases as wealth rises,so he must be risk averse.
D) marginal utility increases as wealth rises,but we can't tell from this if he is risk averse.
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A) If Jill puts $5,000 today into a bank account that pays 3 percent interest,then how much will she have in the account after 2 years?
B) Should ABC Corporation buy a factory today for $2 million,knowing that the factory will yield the corporation $3 million after 5 years?
C) As the winner of a lottery,should Michael choose an immediate payment of $250,000 or should he choose annual payments of $30,000 for each of the next 10 years?
D) You would find it necessary to calculate a future value in order to answer all of these questions.
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A) no less than 9.48 percent.
B) no greater than 9.48 percent.
C) no less than 10.83 percent.
D) no greater than 10.83 percent.
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A) the stock price of a company should reflect the company's expected profitability.
B) the basic tools of finance reflect valid ideas.
C) stock prices reflect rational estimates of a company's true worth.
D) there is any relationship between stock market fluctuations and fluctuations in the economy more broadly.
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A) $240.38
B) $242.24
C) $244.40
D) None of the above are correct to the nearest cent.
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A) $9,090.91
B) $10,000.00
C) $8,264.46
D) $9,523.81
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A) is now lower than it was before,and so Hydro Grow is less likely to build the building.
B) is now lower than it was before,and so HydroGrow is more likely to build the building.
C) is now higher than it was before,and so HydroGrow is less likely to build the building.
D) is now higher than it was before,and so HydroGrow is more likely to build the building.
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A) 8 percent,$15,000
B) 7 percent,$16,000
C) 6 percent,$17,000
D) All of the above are correct.
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A) 2 percent,but not if the interest rate is 3 percent.
B) 3 percent,but not if the interest rate is 4 percent.
C) 4 percent,but not if the interest rate is 5 percent.
D) 5 percent,but not if the interest rate is 6 percent.
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