The value of the put option rises when the underlying asset
A) experiences price increases.
B) experiences price declines.
C) experiences reduced volatility.
D) has a relatively short maturity.
B
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There are frequently situations where you have information on the conditional distribution of Y given X, but are interested in the conditional distribution of X given Y
Recalling Pr(Y = y = x) = , derive a relationship between Pr(X = x = y) and Pr(Y = y = x). This is called Bayes' theorem. What will be an ideal response?
Suppose the Federal Reserve wants to decrease the money supply by $100,000 . If the required reserve ratio is 0.1, which of the following actions will achieve the Fed's goal?
a. The Fed must purchase $100,000 in bonds. b. The Fed must sell $100,000 in bonds. c. The Fed must purchase $10,000 in bonds. d. The Fed must sell $10,000 in bonds. e. The Fed must sell $90,000 in bonds.