You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50The variance in the returns of project A is:
A. 0.
B. 225.
C. 900.
D. 1,600.
Answer: B
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Money cannot serve as a medium of exchange unless it also serves as a store of value. Is this statement true or false? Explain
What will be an ideal response?
The current account surplus
A) is a decreasing function of disposable income and an increasing function of the real exchange rate. B) is an increasing function of disposable income and an increasing function of the real exchange rate. C) is an increasing function of disposable income and a decreasing function of the real exchange rate. D) is a decreasing function of disposable income and a decreasing function of the real exchange rate. E) is an increasing function of disposable income and a decreasing function of aggregate demand.
Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment Economy C: gross investment exceeds depreciation Other things equal, the above information suggests that the production capacity in economy:
a) B is growing more rapidly than either A or C. b) A is growing more rapidly than either B or C. c) A is growing less rapidly than economy B. d) C is growing more rapidly than economy B.
As a strategy to boost enrollment, in January 1996, a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located. For students who accepted the offer, how did this offer affect the opportunity cost of attending college?
A. The opportunity cost did not change, since lost earnings were still a factor. B. The opportunity cost became zero for the typical student. C. The opportunity cost was very low, because the only cost was for books and supplies. D. The opportunity cost did not change, since tuition was not a factor in computing opportunity cost. E. The opportunity cost was lower than if tuition was charged, but there was still a cost.