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- Suppose that you recently bought a new formal outfit for a dedication dinner at Union Station, costing $200. You also bought tickets to this event that cost $1,000. Because the outfit has been altered, you cannot return it, and the tickets are non-refundable. The week before the event, your favorite band announces a surprise free concert, and because this is an obscure band, you are guaranteed to get in (that is, the free concert will not sell-out). Assume that the price of an Uber ride to concert and to Union Station is identical. Further, assume that you wouldn’t have to purchase any new clothes to attend the concert. You should go see the concert if: A) The marginal value of the concert is greater than $200B) The marginal value of the concert is greater than $1,200C) The marginal value of the concert is greater than the marginal value of attending the Law School dedication dinnerD) The marginal value of the concert is less than the marginal value of attenting the law school…When company executives buy and sell stock basedon private information that they obtain as part oftheir jobs, they are engaging in insider trading.a. Give an example of inside information that mightbe useful for buying or selling stock.b. Those who trade stocks based on insideinformation usually earn very high rates ofreturn. Does this fact violate the efficient marketshypothesis?c. Insider trading is illegal. Why do you supposethat is?Senator Ernest Hollings once wrote that "consumers do not benefit from lower-priced imports. Glance through some mail-order catalogs and you'll see that consumers pay exactly the same price for clothing whether it is U.S.-made or imported."Is the statement that the Senator made a true statement or a false statement? True False
- Define "Green Revaluation'Explain its Advantages and Disadvantages.Which of the statements about subprime lending is false? Before the 2008 financial crisis, financial institutions increased the number of subprime loans they issued as home prices continued to rise. If a home owner is unable to afford the mortgage payments, the homeowner can always pay off the mortgage by selling the home. Subprime lending occurs when financial institutions issue loans to individuals who are less likely to be able to repay their loan than individuals who meet a set of standards. The risks associated with subprime lending increase as the likelihood of falling home prices increase.When interest rates decrease: Group of answer choices people who are borrowing money will benefit from this change. everyone benefits from this change. people who are saving money will benefit from this change. no one benefits from this change.
- Which of the following statements about point E is TRUE?how does distortion affects the financial and economic values of the tradable and non-tradable goodsDiscuss the concept of duality in economics, where concepts like risk and return represent dual aspects of investment decisions. Provide examples from financial markets.
- Identify and briefly explain the main effects of decreasing interest rate on theeconomy?: Why are we still talking about the Efficient Market Hypothesis all these years later?The blue curve on the following graph shows the tradeoff between security and tourism; that is, combinations of security and tourism above the blue curve are not possible, and those on or below the curve are possible. The vertical axis measures security, defined as the probability that a terrorist is intercepted before entering the country. The horizontal axis measures the number of yearly visitors to the United States, in millions. Suppose that before 9/11, there were 55 million visitors per year, and the probability of intercepting any particular terrorist at customs and immigration was 10%, as indicated by the purple point (diamond symbol). After the 9/11 attacks, a debate is held in Congress. Members of both parties agree that security measures need to be improved. However, there is some disagreement as to how much additional security is needed. Suppose the first bill that is introduced mandates that security be improved so that the probability of catching a terrorist at the border…