Sam, after taking a $200 loan from the bank to finance an investment that pays $1000 50% of the time and $0 50% of the time at a 100% interest, discovers another riskier investment that pays out $5,000 but only 10% of the time, while the other 90% of the time it pays zero. Would the he want to switch to the riskier investment?
a. Yes because his return has increased
b. No because his liability to the bank has increased
c. No because his return has decreased
d. None of the above
a
You might also like to view...
The short run is best defined as:
A. a period of time sufficiently short that at least one factor of production is fixed. B. one year or less. C. the period of time between quarterly accounting reports. D. a period of time sufficiently short that all factors of production are variable.
Use the following table to answer the question below. Jorge's Production Possibilities SchedulePounds of Green BeansPounds of Corn03202024040160608080 0Jorge's opportunity cost of producing 1 pound of green beans is ________ pound(s) of corn.
A. 1/4 B. 4 C. 1 D. 2
Large fluctuations in money supply growth and smaller fluctuations in the federal funds rate between October 1982 and the early 1990s indicate that the Fed had shifted to ________ as an operating target
A) borrowed reserves B) nonborrowed reserves C) excess reserves D) required reserves
What advantages does monetary policy have over fiscal policy?
What will be an ideal response?