An unexpected fall in Housing Starts should send bond prices __________ and stock prices __________
A) up; up
B) up; down
C) down; up
D) down; down
B
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Purchasing power parity can be used as
A) a long-run gauge, but in the short run large deviations in currency values can exist. B) a short-term gauge, but in the long run large deviations in currency values can exist. C) an indicator of how interest rates will change in the short run. D) an indicator of how interest rates will change in the long run. E) a short-term and long-term gauge of relative currency values.
John has to choose between two jobs: one that offers him $50 per hour and one that offers him $35 per hour. The opportunity cost of choosing the job that offers him $50 per hour is:
A) $1.5 per hour. B) $15 per hour. C) $35 per hour. D) $85 per hour.
Next year's expected price of oil is $90 per barrel. If the interest rate climbs from 5 percent to 20 percent per year and nothing else changes, then according to the Hotelling Principle the price of oil this year
A) will rise. B) will fall. C) will not change. D) could rise, fall, or stay the same.
If you sell twenty-five $100,000 futures contracts to hedge holdings of a Treasury security, the value of the Treasury securities you are holding is
A) $250,000. B) $1,000,000. C) $2,500,000. D) $5,000,000.