Which of the following statements is true?
A. Leverage increases risk.
B. Leverage lowers the expected return and lowers risk.
C. Leverage increases expected return while lowering risk.
D. Leverage lowers the expected return and increases risk.
Answer: A
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The price of a computer in the United States is $1,000. The price of a car in Germany is 10,000 euros. The current exchange rate is 0.9 euros per dollar
a) If a computer is exported from the United States to Germany with no barriers to trade, what will be the price of the computer in Germany? b) If a car is imported to the United States from Germany with no barriers to trade, what will be the price of the car in the United States? c) Suppose the dollar appreciates by 10 percent against the euro. How will the price of a computer exported from the United States change in Germany? d) Suppose the dollar appreciates by 10 percent against the euro. How will the price of a car imported to the United States from Germany change in the United States?
Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays 6 percent annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much will be in the account when you retire?
A. $3,752 B. $46,794 C. $24,871 D. $12,985
Which of the following is true?
a. As the national debt increases relative to GDP, interest on the debt relative to GDP declines. b. As the national debt decreases relative to GDP, interest on the debt relative to GDP rises. c. As the national debt increases relative to GDP, interest on the debt relative to GDP rises. d. The national debt relative to GDP has been constant in recent years. e. The national debt relative to GDP has been falling in the last few years.
What does the graph point at the intersection of $4 per pound and 7,000 pounds of coffee show?
a. an excess of quantity demanded
b. a shortage of quantity supplied
c. an equilibrium point
d. a surplus of quantity supplied