Suppose the Martin Microchip Corporation earns a profit of $20 per share of stock. If the prevailing interest rate is 10 percent and the stock is currently selling for $100 per share, what is the current price/earnings ratio?
A. 20.
B. 0.20.
C. 10.
D. 5.
Answer: D
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Bank capital has both benefits and costs for the bank owners. Higher bank capital ________ the likelihood of bankruptcy, but higher bank capital ________ the return on equity for a given return on assets
A) reduces; reduces B) increases; increases C) reduces; increases D) increases; reduces
Kimberly decides to go back to college full time at the age of 30, and finds herself with a much lower income than she was earning before. Now that she has less income, she finds herself eating less steak and more pasta than ever before. We can conclude:
A. steak and pasta are both normal goods, because they are both food she eats regardless of her income. B. steak and pasta are both inferior goods, because they are both food she eats regardless of her income. C. pasta is an inferior good because her demand increased when her income went down. D. steak and pasta are both inferior goods, because they are both food she eats regardless of her income; also, pasta is an inferior good because her demand increased when her income went down.
In the United States, what percentage of smog comes from automobiles?
a. 5 percent b. 15 percent c. 25 percent d. 40 percent e. 80 percent
The difference between what a productive resource receives as payment for its use in production and the cost of bringing that resource into production is defined as
a. resource cost b. resource price c. rent d. MRP e. loanable funds