A firm is considering using its own funds to finance an investment, but needs an estimate of the discount rate. Currently the firm is earning 4 percent on funds held in a bank account and 6 percent on funds held in stocks. If the firm has 20 percent of its funds in the bank account and the remaining 80 percent in stocks, what is the firm's weighted average cost of capital?
A) 5.8 percent
B) 4.2 percent
C) 4.4 percent
D) 5.6 percent
D) 5.6 percent
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Which type of analyst should generally outperform market index according to the Efficient Markets Hypothesis?
A) technical analysts B) fundamental analysts C) those that follow the random walk D) none of the above
Which of the following is most likely to occur in the labor market during a recession?
A. Bonuses and promotions become more frequent. B. The growth rate of real wages declines. C. The supply of labor increases dramatically. D. New entrants to the labor market have an easier time finding jobs.
In a competitive market, each firm earns ________ economic profits, whereas firms in a successful cartel will earn ________.
Fill in the blank(s) with the appropriate word(s).
Mister Jones was selling his house. The asking price was $220,000, and Jones decided he would take no less than $200,000. After some negotiation, Mister Smith purchased the house for $205,000. Jones' producer surplus is
A) $5,000. B) $15,000. C) $20,000. D) Not able to be calculated from the information given.