Which of the following is not a determinant of option premiums?
A) The volatility of the underlying stock
B) The price of the underlying stock
C) The time to expiration of the option
D) All of the above are determinants of option premiums.
D
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In the late 1990s, debt-financed government spending decreased in Mexico. Following this decrease, consumption spending increased. Ricardian equivalence would explain this increase in consumption as the result of:
a. people's expectation of higher future taxes required to pay off government debt. b. people's expectation of lower future taxes that induce them to save less. c. automatic stabilization of the economy. d. the crowding out effect. e. an increase in current household disposable income.
All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:
A. emigration of skilled workers to other nations. B. a decline in the birth rate. C. an increase in the average skill level of all occupational groups. D. depletion and reduced availability of major energy resources.