Question 1

Which of the following is not an example of financial capital?

Accepted Answer

A) General Motors bonds 
B) Google stocks 
C) Computer equipment 
D) Government bonds 
E) Corporate cash balances 
A) General Motors bonds 
B) Google stocks 
C) Computer equipment 
D) Government bonds 
E) Corporate cash balances

Question 2

The market demand for housing is the result of adding all of the relevant individual demand curves.

Accepted Answer

A) True 
 B)False

Question 3

Draw the supply curve for farmland. Is there economic rent? Explain. Suppose the farmland was separated into high-productivity land and low-productivity land. Which curve would be more elastic? Explain.

Accepted Answer

The supply curve for farmland is close t

Question 4

Which of the following is true?

Accepted Answer

A) Risk declines at a constant rate with diversification. 
B) Risk declines sharply with diversification and then increases as the number of stocks held increases. 
C) Risk declines sharply with diversification and then levels out as the number of stocks held increases. 
D) Risk declines sharply with the number of shares of a stock held. 
E) Risk increases at a constant rate with the number of stocks held. 
A) Risk declines at a constant rate with diversification. 
B) Risk declines sharply with diversification and then increases as the number of stocks held increases. 
C) Risk declines sharply with diversification and then levels out as the number of stocks held increases. 
D) Risk declines sharply with the number of shares of a stock held. 
E) Risk increases at a constant rate with the number of stocks held.

Question 5

Suppose a bond with a face value of $100 matures in two years. If the coupon is $8 and the current interest rate is 5 percent, what is the current price of the bond?

Accepted Answer

The answer of Suppose a bond with a face value...

Question 6

What is the expected return on a stock with a guaranteed dividend of $3 if there is a 30-percent chance its price could rise by 50 percent, a 30-percent chance its price could fall by 50 percent, and a 40-percent chance its price could stay constant at the present price of $60 per share?

Accepted Answer

A) $60 
B) $33 
C) $3 
D) $0 
E) -$27 
A) $60 
B) $33 
C) $3 
D) $0 
E) -$27

Question 7

Poor corporate governance can take the extreme form of outright fraud, and because corporate fraud is legal under U.S. law, it must be dealt with internally, such as with a profit sharing agreement.

Accepted Answer

A) True 
 B)False

Question 8

The possible return on an uncertain investment calculated by weighting different outcomes by their respective probabilities is called the expected return.

Accepted Answer

A) True 
 B)False

Which of the following is not an example of financial capital?

The market demand for housing is the result of adding all of the relevant individual demand curves.

Draw the supply curve for farmland. Is there economic rent? Explain. Suppose the farmland was separated into high-productivity land and low-productivity land. Which curve would be more elastic? Explain.

Which of the following is true?

Suppose a bond with a face value of $100 matures in two years. If the coupon is $8 and the current interest rate is 5 percent, what is the current price of the bond?

What is the expected return on a stock with a guaranteed dividend of $3 if there is a 30-percent chance its price could rise by 50 percent, a 30-percent chance its price could fall by 50 percent, and a 40-percent chance its price could stay constant at the present price of $60 per share?

Poor corporate governance can take the extreme form of outright fraud, and because corporate fraud is legal under U.S. law, it must be dealt with internally, such as with a profit sharing agreement.

The possible return on an uncertain investment calculated by weighting different outcomes by their respective probabilities is called the expected return.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters

Exam 16: Capital and Financial Markets

Which of the following is not an example of financial capital?

The market demand for housing is the result of adding all of the relevant individual demand curves.

Draw the supply curve for farmland. Is there economic rent? Explain. Suppose the farmland was separated into high-productivity land and low-productivity land. Which curve would be more elastic? Explain.

Which of the following is true?

Suppose a bond with a face value of $100 matures in two years. If the coupon is $8 and the current interest rate is 5 percent, what is the current price of the bond?

What is the expected return on a stock with a guaranteed dividend of $3 if there is a 30-percent chance its price could rise by 50 percent, a 30-percent chance its price could fall by 50 percent, and a 40-percent chance its price could stay constant at the present price of $60 per share?

Poor corporate governance can take the extreme form of outright fraud, and because corporate fraud is legal under U.S. law, it must be dealt with internally, such as with a profit sharing agreement.

The possible return on an uncertain investment calculated by weighting different outcomes by their respective probabilities is called the expected return.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters