Marking to market involves
A) changing the futures price to the spot price each day.
B) engaging in arbitrage so as to reduce the risk involved with futures contracts.
C) crediting or debiting the margin account based on the net change in the value of the futures contract.
D) updating the futures price after the market closes each day.
C
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Financial capital flows could include
A) real estate purchases. B) construction of factories. C) sales of a business. D) the purchase of the physical assets and operations of a multinational corporation by another. E) currency market transactions.
Let P be the price of a good and let I represent consumer income. Which of the following demand functions represents a luxury good with inelastic price response?
A) log(Q) = 4 – 2 log(P) + 2 log(I) B) log(Q) = 4 - 0.5 log(P) + 0.25 log(I) C) log(Q) = 4 - 0.25 log(P) + 2 log(I) D) log(Q) = 4 + 2 log(P) + 0.2 log(I)