Suppose you have $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ Lemonade. Each company's stock currently sells for $100 per share. If the temperature next year is lower than average, the stock price for ABC will increase by $20, and the stock price for XYZ will not change. If the temperature next year is higher than average, the stock price for XYZ will increase by $20, and the stock price for ABC will not change. There is a 50% chance that it will be colder than average next year, and a 25% chance that it will be warmer than average. If you purchase two shares of XYZ stock and no shares of ABC stock, your expected gain will be ________.
A. $30
B. $20
C. $0
D. $10
Answer: D
You might also like to view...
Keynes believed that changes in autonomous spending were dominated by unstable fluctuations in ________, which are influenced by emotional waves of optimism and pessimism—factors he referred to as "animal spirits."
A) unplanned investment spending B) actual investment spending C) planned investment spending D) autonomous consumer expenditures
The real income per capita is a measure of the
A) well-being of every individual in the nation. B) well-being of the average individual in the nation. C) well-being of the average employed person in the nation. D) total well-being of the nation.
What income groups are most likely to benefit from state and federal subsidies to higher education? Why?
The production possibilities curves illustrated in Figure 35.2 reveal that
A. The United States has no comparative advantage. B. The United States has an absolute advantage in both goods. C. Mexico has a comparative advantage in baseballs. D. Mexico has no comparative advantage.