A Nov Soybean call has a strike price of $11.50. The underlying November futures price is $12.00. The intrinsic value is
A. -$0.50/bu
B. $0.00/bu
C. $1.00/bu
D. $0.50/bu
Ans: D. $0.50/bu
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The types of games analyzed by the Nash equilibrium are
a. Simultaneous move games b. Sequential move games c. Both of the above d. None of the above
In a liquidity trap situation: a. The Fed could not appreciably lower short term interest rates
b. If the Fed added reserves to the banking system, it would have little effect on investment. c. Traditional monetary policy would be relatively weak in its effects on aggregate demand. d. All of the above are true.
Bonds are considered fixed-income securities because they pay a fixed amount of interest per quarter or per year for the term of the loan.
Answer the following statement true (T) or false (F)