Safe Bank has an outside display which has the time and temperature that is always correct. This is an example of
A) an interference in the workings of the price system.
B) a breakdown in communication between the bank and its customers.
C) a negative externality.
D) a positive externality.
D
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If a trader thinks that the value of yen with respect to the euro is about to fall, which of the following would enable him to make a profit?
A) buy a forward contract for euros B) buy a forward contract for yen C) sell yen in the spot market D) buy euros in the spot market
Considering the value of a financial instrument, the sooner the promised payment is made:
A. the greater the risk, therefore the promise has greater value. B. the less valuable is the promise to make it since time is valuable. C. the more valuable is the promise to make it. D. the less relevant is the likelihood that the payment will be made.