What are the steps involved in using options for a short sale of a stock?
What will be an ideal response?
With a short sale, you borrow the stock from your broker and sell it now, with the plan of buying it back—and repaying your broker—after the stock declines in price.
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Which of the following is true of the dominant strategy equilibrium?
A) A dominant strategy equilibrium always leads to the best outcome for each player. B) A dominant strategy equilibrium cannot be a Nash equilibrium. C) A dominant strategy equilibrium is a Nash equilibrium if each player chooses a strategy that is a best response to the strategies of others. D) A dominant strategy equilibrium occurs if the sum of the players' payoff is zero.
A dominant firm's residual demand curve is
A) the horizontal difference between the market demand curve and the supply curve of the fringe firms. B) the vertical difference between the market demand curve and the supply curve of the fringe firms. C) the demand curve left for the fringe firms after the dominant firm has determined an output level. D) None of the above.
When people make choices that (at the time and with the information they have at their disposal) give them the greatest amount of satisfaction, they are said to be:
a. behaving irrationally. b. applying econometric models to their everyday behavior. c. living under a communist dictator. d. acting in their own self-interest. e. showing no willingness to plan for the future.
Which of the following is an example of a change in derived demand?
A. The demand for ice cream increases during a heat wave. B. The demand for large pickup trucks falls when the price of gasoline increases. C. The demand for buns increases when the price of food truck hot dogs increases. D. The demand for sunscreen falls when the local swimming pool increases prices.