If the bank advertises 6 percent annual interest rate on a one-year certificate of deposit and you anticipate the rate of inflation to rise to 3 percent during the year, then the real rate of interest on the certificate of deposit is
A) 9 percent.
B) 6 percent.
C) 3 percent.
D) 2 percent.
Answer: C
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Which of the following are part of a commercial bank's reserves?
I. cash in the bank's vaults II. loans III. cash in checking accounts A) I only B) I and II C) I and III D) I, II and III
If a firm's fixed cost exceeds its total revenue, the firm should stop production by shutting down temporarily
Indicate whether the statement is true or false
Securities dealers reduce the uncertainty associated with mortgage debt cash flows through the development of
A) convertible mortgages. B) callable mortgages. C) collateralized mortgage obligations. D) tax-exempt commercial paper.
Sunk costs are:
A. costs that have been incurred and cannot be recovered. B. explicit costs that will incur large implicit costs to recoup or recover. C. costs that are upfront on a project and can be pulled out if the business goes under. D. the cost of recovering lost expenditures.