An option's value will never be less than zero because:
A. the option seller is required to make up any shortfall faced by the option buyer.
B. the time value of the option is always less than zero.
C. an option holder will never make an additional payment to exercise the option.
D. the intrinsic value is always less than zero.
Answer: C
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A business owned by a single individual who is fully liable for its debts is called
a. a corporation. b. a proprietorship. c. a partnership. d. an agency.
The cross price elasticity for Papa John's pizza for a change in the price of Pizza Hut pizza is likely to be
A. negative but less negative than -1. B. negative and more negative than -1. C. zero. D. positive.
An example of a public good would be
A. a plane ride from Miami to Dallas. B. flood control protection from a government authority. C. a commuter's trip to work by car from Berkeley to Chicago. D. a bus ride from Phoenix to Los Angeles.
An increase in the expected real interest rate tends to
A. raise desired saving, but lower desired investment. B. raise desired investment only. C. raise both desired saving and desired investment. D. raise desired saving only.