If Southwest Airlines borrows $20 million from a bank to finance the renovation of their corporate offices, this is an example of
A) a stock market transaction. B) a bond market transaction.
C) direct finance. D) indirect finance.
D
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If a person is taxed $100 on an income of $1,000 . taxed $180 on an income of $2,000 . and taxed $220 on an income of $3,000 . this person is paying a:
a. progressive tax. b. poll tax. c. proportional tax. d. regressive tax. e. retro tax.
The consumer's optimum is where
a. MUx/MUy = Py/Px. b. MUx/Py = MUy/Px. c. MUx/MUy = Px/Py. d. None of the above is correct.
Good weather in wheat-producing regions of the world increased the wheat crop. As a result, wheat prices decreased worldwide. Which of the following statements best explains the situation?
a. The supply of wheat increased b. The demand for wheat decreased c. The demand for wheat decreased and the supply of wheat decreased d. The demand for wheat increased and the supply of wheat increased
Suppose that the interest rate on a conventional 30-year mortgage is currently 8%. You receive a call from a mortgage broker who offers you a 30-year adjustable rate mortgage at 2% that is adjusted once each year. Evaluate each mortgage in terms of the following: risk that the monthly payment will change over the next 30 years and interest-rate risk.
What will be an ideal response?