Investing in a mutual fund made up of hundreds of stocks of different companies is an example of all of the following except:
A. risk reduction.
B. diversifying.
C. spreading risk.
D. increasing the variance of a portfolio.
Answer: D
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If the nominal interest rate is greater than the real interest rate,
A) it is an indication of economic growth. B) inflation must be occurring. C) lenders must lose because they can only make loans using the real interest rate. D) the real interest rate must be negative. E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.
The demand for corn increases. As a result, the price of corn will ________, and the less elastic the supply of corn, the ________ will be the effect on the price
A) fall; smaller B) fall; greater C) rise; smaller D) rise; greater
Competition in an industry increases if two firms in the industry combine into one in a merger
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT included in the MZM definition of money?
A) currency.
B) money market funds.
C) travelers checks.
D) small-denomination time deposits.