A put option described as out of the money would find:
A. the market price of the stock is below the strike price.
B. the strike price is below the market price of the stock.
C. the market price of the stock and the strike price are equal.
D. the option has expired.
Answer: B
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Where Y is GDP, C is consumption, I is investment, G is government purchases, T is net taxes, and there is no international trade, public saving equals:
A. Y - T - C. B. T - G. C. Y +T - G. D. Y - C - T.
The increase in spending that occurs because the demand for investment goods increases when the price level falls is known as the
A) price effect. B) international trade effect. C) wealth effect. D) interest rate effect.
Which of the following describes a situation in which demand must be elastic?
a. Total revenue increases by 15 percent when the price of corn dogs rises by 15 percent. b. Total revenue increases by less than 15 percent when the price of corn dogs rises by 15 percent. c. Total revenue decreases by more than 15 percent when the price of corn dogs rises by 15 percent. d. Total revenue increases by $15 when the price of corn dogs rises by $15. e. Total revenue increases by more than $15 when the price of corn dogs rises by $15.
According to the interest rate effect, an increase in the price level causes people to:
a) increase their money holdings, which increases interest rates and decreases investment spending. b) decrease their money holdings, which increases interest rates and decreases investment spending. c) to increases their money holdings, which decreases interest rates and decreases investment spending. d) to decrease their money holdings, which decreases interest rates and increases investment spending.