When the current yield and the coupon rate are equal, the bond is:
A. purchased at a price that equals the face value.
B. a zero-coupon bond.
C. purchased at a price that exceeds its face value.
D. purchased at a discount.
Answer: A
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Billy loses his job as a road construction worker and cannot find another position with equivalent pay and benefits. As a result, he is still checking the want ads and reporting to the unemployment office on a weekly basis. He is considered to be: a. unemployed
b. out of the labor force. c. underemployed. d. lazy.
Which of the following are important components of the hydrologiccycle?
a. evaporation c. precipitation b. transpiration d. all of the above
Judging from the circular flow diagram, what happens to dollars that households earn as wages?
a. They are given to other households in the form of tax distributions.
b. They are given to firms in exchange for capital and labor.
c. They are recycled back to firms when households buy products and services.
d. They are removed from the simple circular flow diagram, making the circle smaller.
After Hurricane Katrina, there was considerable public outrage that many of the properties were not insured against flooding although they were insured against wind damage. What might explain these different approaches to insurance?
A) The risk of wind damage is potentially diversifiable, but the risk of flooding is not. B) The risk of flood damage is potentially diversifiable, but the risk of wind damage is not. C) predatory insurance policies D) Neither the risk of wind damage nor the risk of flooding is diversifiable.