I buy 100 shares of stock at $2 a share, with $100 of my own money. I borrow another $100 at 10 percent interest. The share price stays constant at $2. My rate of return is approximately:
A. 0 percent.
B. ?10 percent.
C. 2 percent.
D. ?5 percent.
Answer: B
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Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply
A. increases $100,000. B. increases $500,000. C. increases $600,000. D. decreases $500,000.
Reducing involuntary unemployment:
a) Helps the economy move on to the Production Possibility Frontier b) Helps shift the economy's Production Possibility Frontier inwards c) Helps the economy move along its Production Possibility Frontier d) Helps the economy move inside the Production Possibility Frontier
Give an example of a sunk cost and describe how sunk costs should affect future actions.
What will be an ideal response?
If the quantity of bagels demanded decreases by 8% when the price of croissants decreases by 16%, the cross-price elasticity of demand between bagels and croissants is
A. 2. B. 0.5. C. -2. D. -5.