Exam 14: The Basic Tools of Finance: Part B

According to the efficient markets hypothesis,stocks follow a random walk so that stocks that increase in price one year are more likely to increase than decrease in the next year.

(True/False)

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Question 41

The market for insurance is an example of diversification.

(True/False)

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Question 42

Speculative bubbles may arise in part because the value of the stock to a stockholder depends on the final sale price.

(True/False)

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Question 43

Historically,stocks have offered higher rates of return than bonds.

(True/False)

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Question 44

The future value of $1 saved today is $1/(1 + r).

(True/False)

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Question 45

Risk aversion simply means that people dislike bad things to happen.

(True/False)

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Question 46

If the interest rate is 8 percent,then the present value of $1,000 to be received in 4 years is $735.03.

(True/False)

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Question 47

Risk-averse persons will take no risks.

(True/False)

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Question 48

Increasing the number of corporations whose stocks are in your portfolio reduces market risk.

(True/False)

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Question 49

The concept of present value helps explain why the quantity of loanable funds demanded decreases when the interest rate increases.

(True/False)

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Question 50

If a person had increasing marginal utility,then the decline in utility from losing $1,000 would be greater than the increase in utility from gaining $1,000.

(True/False)

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Question 51

Historically the return on stocks has been higher than the return on bonds.In part this reflects the higher risk from holding stock.

(True/False)

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Question 52

According to the Rule of 70,it takes 70 years for a sum of money to double in value when the interest rate is 5 percent.

(True/False)

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Question 53

When the price of an asset rises above what appears to be its fundamental value,the market is said to be experiencing a speculative bubble.

(True/False)

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Question 54

Showing 41 - 54 of 54

Exam 14: The Basic Tools of Finance: Part B

According to the efficient markets hypothesis,stocks follow a random walk so that stocks that increase in price one year are more likely to increase than decrease in the next year.

The market for insurance is an example of diversification.

Speculative bubbles may arise in part because the value of the stock to a stockholder depends on the final sale price.

Historically,stocks have offered higher rates of return than bonds.

The future value of $1 saved today is $1/(1 + r).

Risk aversion simply means that people dislike bad things to happen.

If the interest rate is 8 percent,then the present value of $1,000 to be received in 4 years is $735.03.

Risk-averse persons will take no risks.

Increasing the number of corporations whose stocks are in your portfolio reduces market risk.

The concept of present value helps explain why the quantity of loanable funds demanded decreases when the interest rate increases.

If a person had increasing marginal utility,then the decline in utility from losing $1,000 would be greater than the increase in utility from gaining $1,000.

Historically the return on stocks has been higher than the return on bonds.In part this reflects the higher risk from holding stock.

According to the Rule of 70,it takes 70 years for a sum of money to double in value when the interest rate is 5 percent.

When the price of an asset rises above what appears to be its fundamental value,the market is said to be experiencing a speculative bubble.

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Measuring a Nations Income: The Economy's Income and Expenditure

Measuring a Nations Income: The Measurement of GDP

Measuring a Nations Income: The Components of GDP