Which of the following is the best example of the concept of "normal"?
A. Hot dogs and hot dog buns
B. SUVs
C. Coke and Pepsi
D. Ramen noodles
Answer: B
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If you thought the share price of a stock was going to rise, would you be more likely to buy a call option or a put option?
A. a call option B. a put option C. a call option and a put option D. There is not enough information given to answer this question.
If the Federal Reserve sets a required reserve ratio of 0.2 and a bank has $100 million in loans and $80 million in deposits, what is the level of required reserves for the bank?
a. $100 million b. $16 million c. $80 million d. $20 million e. $36 million
Apply the definition of risk provided in the textbook to an individual's decision to purchase a car insurance policy. Suppose that the individual has two possibilities: no accident ($0 gain/loss) and accident (-$30,000 loss). If the probability of an accident is lower than the probability of an accident occurring (say the probability of an accident is 10%), then why do people buy car insurance? How is this related to the concept of value at risk and the time horizon of investment decisions?
What will be an ideal response?
The unemployment rate was increasing from 6 percent to 7 percent could be interpreted as an increase in the natural rate of
A. inflation. B. unemployment. C. economic growth. D. aggregate supply.