Derivatives are securities that derive their values from the values of underlying investments
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
Which of the following does not determine the position and shape of a society’s production possibilities frontier?
A. Physical resources B. Price level C. Skills and technology D. Past investment in factories and in research
Which of the following statements regarding the long-term equilibrium is TRUE?
A) As new firms enter a market, each existing firm increases the quantity it produces. B) Firms leave a market if they are making zero economic profit. C) Entry and exit stop when firms are making an economic profit. D) Entry and exit stop when firms make zero economic profit.
How can a bond investor hedge against a possible bear market in bonds?
A) sell futures contracts on Treasury notes B) buy futures contracts on Treasury notes C) going long in the spot market D) going short in the spot market
Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to pay $300, the airline should
a. sell the ticket because the marginal benefit exceeds the marginal cost. b. sell the ticket because the marginal benefit exceeds the average cost. c. not sell the ticket because the marginal benefit is less than the marginal cost. d. not sell the ticket because the marginal benefit is less than the average cost.