Parties who have sold a futures contract and thereby agreed to ________ (deliver) the bonds are said to have taken a ________ position
A) sell; short
B) buy; short
C) sell; long
D) buy; long
A
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The assumption that the magnitude of the slope of an indifference curve decreases moving to the right along the indifference curve is known as the assumption of
A) the price effect. B) a diminishing marginal rate of substitution. C) an increasing marginal rate of substitution. D) an indifference curve effect.
Perfect competition is a market structure
A. resulting from individual firms selling highly differentiated products. B. in which any firm would have serious impediments to entry or exit. C. where there is significant regulation and markets are always efficient. D. in which individual buyers and sellers have no effect on the market price.
Given a choice between two investments with the same expected payoff most people will:
A. choose the one with the lower standard deviation. B. calculate the variance to assess the relative risks of the two choices. C. be indifferent since the expected payoffs are the same. D. opt for the one with the higher standard deviation.
People's abilities to bear risk increases with:
a. their abilities to understand the market. b. their abilities to diversify their asset holdings. c. their abilities to invest in risky assets over a large time period. d. their abilities to judge the probability of outcomes.