Explain whether the historical evidence supports the use of a normal model or a lognormal model
What will be an ideal response?
The support for a normal model or a lognormal model depends on the current level of interest rates as described below.
Empirical evidence reviewed regarding the relationship between interest-rate volatility and the level of rates suggests that the relationship is weak at interest rate levels below 10%. However, for rates exceeding 10%, there tends to be a positive relationship. This evidence suggests that in rate environments below 10%, a normal model would be more descriptive of the behavior of interest rates than the lognormal model. Moreover, empirical tests suggest that the impact of negative interest rates on pricing is minimal, and therefore one should not be overly concerned that a normal model admits the possibility of negative interest rates.
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A broker negotiated the sale of a client's acreage. Shortly after the seller accepted the buyer's offer, the broker found out that the buyer's agent had recently arranged for the same buyer to pay a much higher price per acre for similar acreage nearby. In this situation:
A. nothing can be done about it now that there's already a contract B. the broker should disclose this information to the seller C. the broker should contact the other agent and try to renegotiate the contract D. the contract is void for inadequate consideration
Which of the following is true of employment discrimination as defined under Title VII of the Civil Rights Act of 1964?
A) Disparate-treatment discrimination can be proven through statistical data about an employer's employment practices. B) Disparate-impact discrimination occurs when an employer adopts a work rule that is neutral on its face but is shown to cause an adverse impact on a protected class. C) Disparate-treatment discrimination occurs when an employer discriminates against an individual of a protected class. D) Sexual harassment and refusal to hire physically challenged employees are illustrations of disparate-impact discrimination.