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44. Insider trading expands the size of the market.
a. True
b. False
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- You are on the board of directors of a private high school, which is hiring new tenth-grade science teachers. As you think about hiring someone for a job, what are some mechanisms you might use to overcome the problem of imperfect information?What are some ways a seller of labor (that is, someone looking for a job) might reassure a possible employer who is faced with imperfect information?RISKS'R'US Insurance Company, who Brenda has her home insured with, became insolvent the same day her house was struck by lightning. Damage to her home was $7,500. What is the best thing for Brenda to do now? Select one: O a. Become a bag lady. O b. Try to collect something from the reinsurance companies RISKS'R'uS has treaties with. O c. Pay the damages herself. O d. Sue RISKS'R'US for payment like their other creditors. e. Try to collect something from her states' guaranty fund.
- The Securities and Exchange Commission (SEC) wants to review certain documents of Treasury Bonds, Inc. Whether it is permissible for the SEC to request or review the documents depends on whether the documents are a. technical. b. relevant. c. incriminating. d. valuable.1. What is an example of a company that uses a signal to help sell its product. What is the signal? 2. What information is the signal trying to convey? 3. Is the signal effective? Why or why not?You are a crude oil dealer. You intend to sell 50,000 barrels of crude oil in December. Each contract calls for delivery of 2,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only four possible oil prices in December which are $50, $60, $70, and $80.i. Explain what action you would take to protect from changes in oil prices in December. Provide reasons for your action.ii. Calculate the total proceeds (sales proceeds plus loss or profit from futures contracts) for each of the possible price in December.
- 1. Ben and Jerry are two partners-in-crime, who have robbed a bank. Ben got caught and is questioned by the police. He has got three options: to stay silent, confess, or tell the police that it was Jerry. Jerry can either remain at home, go to the police and blame Ben, or kill Ben's dog and cat. Ben feels good about confessing if Jerry does not do anything against him and feels good going to the police otherwise. Jerry on the other hand would hate to kill Ben's dog and cat, but would indulge in the revenge if Ben went to the police. For Jerry it is bad if Ben goes to the police. Ben is the row player and Jerry is the column player. Jerry Home Police Kill Ben Silent (3,4) (-4,5) (-5,3) Confess (-2,5) (-3, 6) (-7,-5) Police (-3,-7) (-1,-6) (-4,-2) Find the Nash equilibrium in pure strategies when a. Ben and Jerry move at the same time, not knowing what the other does. b. Ben moves first, then Jerry can observe this and subsequently makes his choice. c. Jerry moves first, then Ben can…I. A foreign insurance company is one that is domiciled in a foreign nation. II. An insurance company is considered an alien insurer in all states other than the one it is domiciled in. A. I is true; II is true B. I is true; II is false C. I is false; II is true D. I is false: II is false13. Adverse selection refers to а. the phenomenon that occurs when one party in an exchange takes advantage of knowing more than another party b. the tendency for individuals to alter their behaviour once they are insured against loss c. the tendency for individuals to engage in insurance fraud d. both the tendency for individuals to alter their behaviour once they are insured against loss and the tendency for individuals to engage in insurance fraud
- 1. The distributor can sell 100 "1 SETTING DERIVATIVES=0" T-shirts at $10.00 per shirt but can sell 5 more for each 10 cents she decreases the price. Find the price that maximizes her revenue. 2. Egbert is out in the woods 600 feet north of an east-west road. He wants to get to a point on the road 2000 feet west of where he is as quickly as possible; he figures he could walk 4 ft./sec in the woods and 6 ft./sec on the road. Where on the road should Egbert head to minimize the total time it would take to get to his destination?An insurance company offered drivers auto insurance. Assume that claims by safe drivers cost the insurer $1,000 over the term of the policy and claims by reckless drivers costs $5,000. Drivers know whether they are safe or reckless, but the insurer only know that 10% of drivers are reckless. a. What is the expected cost of losses to the insurance company? b. How much does the insurance company have to charge for auto insurance to break-even? Why? I found answer for part a. but I didn't find any answer for part b. Could you please post answer for part b. Please don't repeat answer from old post. I just need answer for part b. Thank youA call option is "in the money" when the A. market price of the security exceeds the exercise price.B. market price of the security equals the exercise price.C. market price of the security is less than the exercise price.D. premium on the option is less than the exercise price.
