Which of the following will reduce the risk of equity (stock) investments?
A) The purchase of shares of a mutual fund that holds the stocks of many diverse corporations.
B) All of the above.
C) The purchase of shares in firms doing business in a wider variety of industries and markets.
D) The purchasing and holding of equities over a lengthy period of time.
B) All of the above.
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As a method of resource allocation, force
A) is not important. B) plays a crucial negative role. C) plays a crucial positive role. D) plays a crucial role for both good and ill.
A bond with a par value of $1,000 is traded at $2,000 . The interest rate offered on the bond is 10 percent per annum. The bond matures after a period of 5 years. The yield from the bond is:
a. 5 percent. b. 10 percent. c. 20 percent. d. 15 percent. e. 2.5 percent.
Each year, the president must submit a budget proposal to Congress by:
a. October. b. July. c. January. d. April.
The following equations represent a simultaneous equations model:
K1= 
1K2+ 
1z1 + u1
K2= 2K1+ 2z2 + u2
OLS will suffer from simultaneity bias if:
A. u1 is correlated with z1.
B. z1 is correlated with z2.
C. K2 is correlated with u1.
D. K1 is correlated with u1.