An interest rate swap involving the exchange of floating-rate obligations for fixed-rate obligations is known as
A) swaption.
B) swap option.
C) forward swaps.
D) plain vanilla.
D
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Suppose a bet is placed on the outcome of the flip of a coin – if the coin comes up heads, you get $25 and if it turns up tails, you lose $25 . If you accepted this bet, does it imply that you are risk averse, risk neutral, or risk loving?
What will be an ideal response?
In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market. B. decrease growth because they slow the growth of capital. C. increase growth because they stop exploitation by foreigners. D. decrease growth because they cause inflation.
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 What is the socially optimal number of bikes for Island Bikes to rent out each day?
A. 4 B. 3 C. 5 D. 6
Which of the following expenditures would not be included in GDP?
a. Purchase of a new lawnmower. b. Purchase of a silver cup previously sold new in 1950. c. Purchase of a ticket to the latest movie. d. All of these would be counted in GDP.