Answer the following statements true (T) or false (F)
1) Compound interest refers to the multiple interest rates an investor will be paid in a diversified
portfolio.
2) A 10 percent rate of interest will increase the value of an asset more quickly if the interest is
compounded.
3) Future value measures the present-day value of returns or costs expected to arrive in the
future.
4) The present value of a stream of lottery payments is less than the size of the stated jackpot.
1) F
2) T
3) F
4) T
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Giving managers an ownership stake in a company is an example of
A) a command system. B) an incentive system. C) a system that encourages managers to become agents that monitor their principals. D) economies of scope.
Banks are required to hold reserves against the total value of all their assets
a. True b. False Indicate whether the statement is true or false
In August of this year, Jack can best estimate the current year's GDP by:
A. multiplying the most recent quarter's GDP estimate by four. B. adjusting the first two quarterly estimates of GDP for seasonal variation. C. taking an average of the last four quarterly estimates of GDP available. D. looking back at previous years GDP in order to make an accurate projection.
For a monopolistically competitive firm
A) price equals marginal revenue at all levels of output. B) price is less than marginal revenue at all levels of output. C) price is greater than marginal revenue at all levels of output except for the first unit. D) the demand curve is perfectly inelastic and marginal revenue is zero.