A company's net present value:
A. is the current value of the company’s expected future cash flows.
B. is a measure of the book value of that company.
C. tells you the "correct" price of shares in the company.
D. adds up the value of all the assets a company currently owns.
A. is the current value of the company’s expected future cash flows.
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Economies of scale exist when:
A. the average cost of production falls as output rises. B. firms become larger. C. doubling all the inputs leads to less than double the output. D. input prices are falling.
Consumer Financial Protection Bureau (CFPB) established 2010 ?
In the money market, if the interest rate exceeds the equilibrium interest, there is a surplus of money. How is the surplus eliminated?
A) People buy bonds to rid themselves of the surplus money, bidding up their price and pushing interest rates down. B) Banks will lend out the surplus, lowering interest rates. C) The Federal Reserve will destroy currency, reducing the quantity of money. D) The high interest rate increases the demand for money, eliminating the surplus.
Assume that a single insurance plan covers 2,000 low-risk people and 1,000 high-risk ones, all of whom pay the same premium, at which the insurer breaks even. If the average claim submitted by low-risk people is $100 while that submitted by high-risk people was $1,000 . what would be the net benefit to a low-risk person from holding a policy?
a. -$300 b. -$250 c. $100 d. $500