Based on the information in Scenario 15.7, if you expect the price to be $21 next year, you should
A) keep the wine in barrels until next year no matter what the interest rate.
B) keep the wine if interest rates are above 5%.
C) keep the wine if interest rates are below 5%.
D) sell the wine now.
E) do nothing until you know what the interest rate is going to be for the following year.
C
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Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . If Samantha is offered a full coverage insurance policy for her house at $2000, would she buy the insurance?
a. Yes because she gets to now enjoy her wealth risk-free b. No, because she can take the risk and be better off c. Yes, because she gains on average with the insurance d. Both A&C
What has been the range for the duration in months of U.S. recessions between 1950 and 2009?
A. 2 months to 5 months B. 6 months to 18 months C. 19 months to 25 months D. 26 months to 30 months