Assuming your local cash price is quoted above the CBOT futures price, an increase in transportation costs in your area would be expected to have what effect on the basis:
A. Widen the basis.
B. Strengthen the basis.
C. No effect on the basis.
D. Not enough information to tell.
Answer: B. Strengthen the basis.
Economics
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Outline the policy choices for contractionary and expansionary options of the Fed
Economics
Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000 . He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%. Abdul's annual implicit cost of capital is
a. $8,000. b. $4,000. c. $2,000. d. $1,000.
Economics