An option allowing the owner to sell an asset at a future date is a
A) put option.
B) call option.
C) futures contract.
D) forward contract.
A
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If a firm can earn a profit stream of $50,000 per year for 10 years, that profit stream is worth
A) more than $500,000 today. B) $500,000 today. C) less than $500,000 today, but a positive amount. D) nothing today E) some amount, but whether it is more, less or the same as $500,000 cannot be determined.
A reasonable dynamic assumption for the IS-LM model is that
A) the economy is always on both the IS and LM curves. B) the economy is always on the IS curve, but moves only slowly to the LM curve. C) the economy is always on the LM curve, but moves only slowly to the IS curve. D) the money market is quick to adjust, but the bond market adjusts more slowly. E) adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an IS shift.