Underwriting spreads on equity issues are much __________ than on debt issues because stock prices are so __________ relative to bond prices
A) smaller; steady
B) smaller; volatile
C) larger; steady
D) larger; volatile
D
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Explain two different ways to determine the profit-maximizing level of output for a firm in a perfectly competitive market
What will be an ideal response?
The situation in which a person places greater value on a good as more and more people possess it is called the
A) Bandwagon Effect. B) Greater Value Effect. C) Snob Effect. D) Behavioral Effect.
When economists use the term Ceteris paribus, they are indicating that:
a. the relationship between two economic variables cannot be determined.
b. the analysis is true for the individual but not for the economy as a whole.
c. all other variables except the ones specified are assumed to be constant.
d. their conclusions are based on normative economics rather than positive economic analysis.
Under the liquidity premium theory a flat yield curve implies:
A. long-term interest rates are higher than short-term interest rates. B. there is no risk premium for longer-term maturities. C. short-term interest rates are expected to remain constant. D. short-term interest rates are expected to decrease.