Many financial instruments are standardized because:
A. it is believed that most parties to a contract do not read them anyway.
B. the standardization of contracts makes them harder to understand.
C. it is required by the government.
D. complexity is costly, the more complex a contract, the more it costs to create.
Answer: D
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Define GDP
What will be an ideal response?
Real gross national product is
a. the same as national income if there were no depreciation and taxes. b. always less than national income. c. always greater than real gross domestic product. d. always less than nominal gross national product.
If TruLite's factory workers receive an hourly wage, described by the equation; Employee compensation = $5.00 + 0.10Q, where Q is the number of light switches installed per hour, then:
A. effort is unimportant in the performance evaluation system of the firm. B. $5.00 is the basic incentive to produce. C. Q is entirely dependent on random elements in the production system. D. $0.10 is the incentive to increase effort.
If the U.S. interest rate is 4% per year and the U.K. interest rate is 9% per year, then:
a. an investor will see no reason to invest in the United Kingdom. b. an investor will borrow money in the United Kingdom and invest it in the United States. c. an investor can borrow money in the United States and invest it in the United Kingdom and profit. d. an investor will find that the returns are the same in both countries.