If you buy an option for a premium of $0.30/bu what is the most you can lose?
A. $0.30/bu
B. The initial margin deposit plus $0.30/bu
C. Your potential loss is "unlimited"
D. The accumulated profit or loss as shown in the margin account.
Answer: A. $0.30/bu
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Monetarists argue that fiscal policy is ineffective because:
a. the velocity of money is predictable. b. the crowding-out effect reduces investment. c. prices and wages are sticky in the short run. d. it causes the value of the dollar to depreciate.
Which of the following statements is true?
a. Private international foreign exchange transactions affect the monetary base. b. Both private foreign exchange transactions and central bank interventions in the foreign exchange market affect the monetary base. c. Neither private foreign exchange transactions nor central bank interventions in the foreign exchange market affect the monetary base. d. Central bank interventions in the foreign exchange market affect the monetary base.